Blogger Cho provides a link to the new Equinox presentation on their massive Lumwana project. The company apparently still think they are special and won't have to pay the new ining taxes because uniquely their Development Agreement is not subject to changes in Zambian law. I don't get it. The legislation is through. It's available for public inspection. The idea that it only applies selectively appears a blatant breach of the rule of law. And yet this company continually insists the laws of the land don't apply to them. There has been, as far as I can tell, no official comment on this issue from Zambian politicians or officials to suggest we are dealing with anything but wishful thinking from Equinox. There's an interesting discussion on Cho's blog about what Lumwana should or should not be asked to pay. But I can't even for the moment establish the facts. I assume the law applies and if they fail to pay the first tax bill that comes through, will face the consequences like anyone else refusing to pay their taxes. Any ideas readers?
4 comments:
They just havent dished out the bribes for the uranium licences yet.
I say send in the bailiffs.
Or, if Equinox doesn't have the money to pay their taxes, let them pay with an equivalent of Equinox shares.
I think that the privatisation of the mines was a bad move to begin with. Maybe this will be an opportunity to reverse it.
What really gets me is that it are the mines which are responsible for much of the poor condition of the roads. The millions of tonnes of ore they haul around the country every year cause huge wear and tear, but they won't pay taxes for road repairs?
The fact, as of this moment, Alistair, is that Lumwana is in the same boat as all the other mines. That is, their specific DA no longer carries weight re. the mining taxes.
However, my impression from interviews and discussions here is that Lumwana is still in the process of 'negotiating' a different tax regime than other mines based on the argument that they are greenfield, have put in massive investment, and all the rest.
Given that the company has a very good PR strategy in place--formal and informal--I think we haven't heard the last of this matter. (btw, the MD danced a bit at Chief Mukumbi's ceremony yesterday). My hunch is that LMC wants the government to set up a mine-specific tax regime instead of uniform structure as they currently have.
It appears to me that the DEV AGREEMENT holds all the answers for LMC. If they havent kept their end of the deal then they would be on a weak negotiating position.
I wonder what short comings LMC have in this regard, any thoughts i have mine but would like to know others views here.
PD.
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