So... First Quantum are special after all!

Reuters report today that Mines Minister Mwansa has confirmed that First Quantum is renegotiating its tax regime and that other might follow.

Mines and Mining Development Minister Kalombo Mwansa told Reuters in an interview the government was in advanced talks with Canada's First Quantum Minerals, which has raised serious objections to the new fiscal regime. "There have been discussions between First Quantum and the ministers for justice and finance over the tax issue," Mwansa said.

"We are ready to dialogue to keep mining viable so that they (mining companies) keep expanding and remain profitable." Mwansa said negotiations to cut some taxes would be extended to other mining investors who approach the government over their operational difficulties. "We are open to dialogue if there are problems at individual mines because the taxes were introduced to benefit the government while they (firms) remain viable," Mwansa said.

Peter Hitchens, China and Sata

Here's a strange intersection of old-fashioned China-bashing by a well-known defender of Western imperialism, old and new, and a relatively serious discussion of labour conditions in DRC mines and the impacts of PF campaigning in Zambia. Shows the way in which the Zambian and DRC mine labour situations, which have long been ignored by academics, journalists and politicians, suddenly become more sexy when they bump into with the western pre-occupation du jour. The Chinese mines really aren't that much worse than those owned by other multinationals!

Anyway the long article is in the (British) Daily Mail.

Election fever puts wind up FQM management

This story in today's Post made me laugh.

KANSANSHI Mining Plc has banned its workers from conducting political campaigns for the presidential election on the mine site.

In a memo addressed to Kansanshi Mine and First Quantum Mining Operations (FQMO) mining division workers on Monday, Kansanshi general manager Russell Alley said no worker would be permitted to use company resources for political campaigns.

"The election campaign is bound to be very active in the run- up to the election date, the First Quantum Minerals Group policy is for us as a company to remain non-partisan," Alley stated. "However, staff are free to exercise their right to affiliate with or support a candidate of their choice but not be permitted to do this or influence others on the mine site."

Alley warned of serious action against any worker found to be breaching the outlined guidelines of the company regarding the presidential election.

Alley urged workers to maintain peace and harmony during the campaign period and on the actual day of voting.

But sources at the mine said management had been prompted to ban political campaigns because most workers are campaigning for opposition political parties.

They said the workers at Kansanshi Mine and FQMO had complained that the MMD government was more concerned on protecting the welfare of expatriate workers and the mine than protecting its own people.

Sata focuses on labour ights

The story pasted below, from the Daily Mail this morning suggests that, having been a key driver of the state's focus on mines safety and taxation after the last election, opposition leader Michael Sata will focus this time round on terms and conditions. Without an alliance with the smaller opposition parties, particulally the UPND, it seems relatively unlikely Sata will improve significantly on his showing in 2006, but his ability to highlight popular concerns and pressure the ruling party is already proven. With an update to Zambia's ancient and oppressive labour legislation constantly promised and never delivered, this could be an important intervention.

PF's positions on two major policy issues appear confused however. How will they align themselves on the proposed return to a one-industry, one-union rule? Joyce Nonde of the threatened FFTUZ is one of the few civil society leaders to explicitly back PF. But the issue is divisive on the Copperbelt. Secondly, what is the PF position on mine taxes. Sata's staunchest supporters, Given Lubinda and Guy Scott have led the charge against the companies in Parliament threatening to lead mass action against companies refusing to pay. And yet, just as a political open goal has opened up in the middle of the campaign, with the companies openly resisting the new regime, PF suddenly seems to have gone quiet. Sata decided some months ago that the appropriate line of attack against the MMD was the means by which the taxes were imposed unilaterally. That left a gap between the most senior PF politicians. Can they close it and speak with one voice?

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Sata counsels mine owners
By MUKULA MUKULA

PATROTIC Front (PF) president Michael Sata has urged mine owners on the Copperbelt to improve conditions of service for their workers.

Mr Sata also said mine owners owing suppliers should settle the debts.

He was addressing Kitwe residents at Freedom Park.
Mr Sata is one of the presidential candidates in the October 30 election.

He said if elected, he would introduce laws that would bring dignity to workers, especially those working in the mines.

Mr Sata alleged that miners on the Copperbelt were suffering because the privatisation of mines was not done well.

He said he would pursue those who allegedly mishandled the privatisation of the mines under President Chiluba.

Mr Sata alleged that he was in the MMD long enough to know the people who mishandled the privatisation process.

“We shall change the laws to suit our environment and to suit the international employment act. Any job that can be done by Zambians should not be for expatriates,” he said.

Mr Sata said he had no intention of chasing away any investor as he would welcome those who respect Zambia’s labour laws.

Mr Sata said if PF forms government, he would ensure that every chiefdom and township had a secondary school while those run by the missionaries would receive 100 per cent funding.

He said pensioners and retirees would promptly receive their dues in his government.

Lumwana fancies can hold old DA

More on that gradual climbdown from the Zambian state... Reuters seem to be acting as a mouthpiece for more and more assertive companies. They report that Equinox Minerals expects its existing agreement with the Zambian government will shield it from higher taxes being implemented in the country.

Speaking to analysts and investors in Toronto, CEO Craig Williams said that Equinox's 2005 development agreement, which includes lower taxes, has so far been respected and he expects that will continue. "There's no guarantees here, but we do believe our development agreement has strength," he said, but added: "There might be some room for compromise on both sides."

Blackmont Capital analyst George Topping said Lumwana is still a strong asset, even if Equinox ends up being taxed to the full extent of the new laws. "I think they will have to pay more tax. Whether they'll have to pay the full extent, I'm not sure," he said.

Williams also said he does not expect next month's presidential election in Zambia will be an issue for the mine.

Lumwana is now expected to start production in December, after a fire at the site's processing plant delayed its original startup date of August.

Full production should be reached in May or June 2009 at an average 172,000 tonnes of copper a year for the first six years of the mine's 37-year life.

Equinox also expects to eventually produce uranium from the mine and use it as a cost offset. It envisions building its own treatment facility, which could be running in six years, and would save the cost of transporting metal to other smelters.

The company has often been rumored as a takeover target, with likely suitors including First Quantum Minerals (FM.TO: Quote, Profile, Research, Stock Buzz), which holds just over 16 percent of Equinox.

Blackmont's Topping said he still sees it as a target, adding that any buyer would likely wait until after next month's presidential election and the finalization of the new tax regime.

That Miningbeat blog in full - KCM/FQ/ZCCM/ZCI

CLARIFICATION - THIS ARTICLE HAD BEEN PASTED TO THE SITE WHERE I FOUND IT FROM Minesite. You need a password to view the site but it is free. The original was written by Michael Coulson.

http://www.minesite.com/nc/minews/singlenews/article/interesting-goings-on-at-zambian-consolidated-copper-mines/80.html?tx_ttnews[swords]=Coulson&cHash=72e9436e2c

There is so much information and, let's admit it, unsourced speculation in this article I thought it worth reproducing the whole thing particularly as it doesn't seem to be possible to comment on the original where it was posted....

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Interesting Goings-On At Zambian Consolidated Copper Mines

There have been some significant developments down in Zambia in the wake of Minesite’s earlier story that the Zambian government might be prepared to reconsider the new levels of mining tax that it’s imposing, if the government’s own 87 per cent owned Zambian Consolidated Copper Mines (ZCCM) started to receive meaningful dividends from its Copperbelt joint ventures. A particular emphasis was laid on the Kansanshi project.

We now understand that First Quantum, the Canadian miner which operates Kansanshi, has entered into discussions with ZCCM about the payment of dividends from ZCCM’s accumulated but undistributed share of Kansanshi’s profits. These, after taking account of ZCCM’s share of Kansanshi development and capital spending, are believed to be well north of US$100 million and rising fast. The problem that has arisen for ZCCM is that when the Zambian copper industry was restructured in the early part of the decade, the joint venture agreements between the new foreign operators, ZCCM, and the government did not address the payment of dividends to the minority shareholder, ZCCM. Some operations, such as Mopani and Konkola, have occasionally paid dividends, but as the copper price has stayed high the profits flowing to the foreign operators have risen sharply, far outpacing any dividends flowing to ZCCM.

In November of last year ZCCM’s then chief executive, Joseph Chikolwa, addressing a conference in London, revealed that he believed that ZCCM’s net asset value was around US$1 billion or US$11 per share. This figure derives from a valuation done for the company by, we believe, Rothschild. ZCCM is mainly traded in Paris where it is priced in Euros. The US$11 figure was then equivalent to around €8.00 per share (the current price is around Euros €2.50; in October 2007 the share price reached Euros €6.40). Those who know both ZCCM and First Quantum generally consider that Kansanshi is the most valuable and profitable of the current Copperbelt mines.

However, in the last week or so, an intriguing transaction has been proposed in India concerning Vedanta’s Konkola copper operation. The Anglo-Indian group now owns a 79 per cent stake in Konkola following the controversial acquisition of ZCI’s 28.4 per cent holding. Following the recently announced re-structuring of the Vedanta group, Sterlite Industries India (SII), 60 per cent owned by Vedanta, is to acquire Vedanta’s 79 per cent stake in Konkola, in exchange for 364 million Sterlite shares. Currently Sterlite shares trade in Bombay at Rs505 (US$11.20), but as part of the Vedanta restructuring SII is getting rid of its stake in Madras Aluminium (MALCO) so, with the issue of new shares to Vedanta as well, SII’s residual value will have to be adjusted.

The Indian broking firm, Emkay Shares, has calculated a residual per share value for SII, once all the restructuring has been completed, of Rs355. MacQuarie suggests a slightly lower figure. This translates into a value for the Konkola asset of Rs355 times 364 million new SII shares, or Rs129 billion. Since that value is for 79 per cent of Konkola, it follows that if a similar value is attributed to ZCCM’s residual 21 per cent stake, the residual stake would be worth Rs34 billion, or €530 million, or €5.88 per ZCCM share.

It’s worth pointing out in passing how these figures compare with Vedanta’s US$213 million take-out price for ZCI’s 28.4 per cent stake in Konkola. In today’s circumstances ZCI’s holding would have been worth around US$990 million! It’s little wonder that ZCI fought so long and hard, if unsuccessfully, to get its’ stake valued on a current market basis, rather than on the 2003 copper price basis that was used.

Getting back to ZCCM, if it was interested in selling its Konkola stake the price would have to reflect current copper prices, as SII stake clearly does. But of course Konkola is not considered the jewel in ZCCM’s crown. That honour undoubtedly falls to Kansanshi. Last quarter ZCCM’s share of Kansanshi’s after tax profits was US$31million, or US$124 million annualised. If one applies the earnings multiple which operator and majority Kansanshi shareholder, First Quantum, currently sells on in the Canadian market - around five times - then ZCCM’s Kansanshi stake is worth US$620m, or €440 million, or €4.90 per share.

So we already have ZCCM, using reasonable market assessed values, with a net asset value of €10.78, against a current share price on the Paris Marche Libre of €2.50, and we have not yet ascribed a value to ZCCM’s holdings in Konkola North, Mufulira/Nkana or any of the other Copperbelt interests, such as Chambishi, Chibuluma and Luanshya, not mention its stakes in Ndola Lime, Maamba Collieries, Copperbelt Energy, Equinox Minerals and Albidon.

So what is ZCCM itself up to in order to try and encourage a higher market value for its shares, and what problems does it face in achieving this? The first thing to say is that ZCCM’s management was only vaguely aware that its shares traded in Paris and did not have up-to-date information on price movements there. This is because the Government has 87 per cent of the company and private shareholders are largely unknown as their holdings are mainly in nominee names. ZCCM shares are also listed in London and ZCCM pays fees to Cazenove to maintain that listing, but don’t hold your breath whilst the switchboard locates the responsible Caz executive! ZCCM is considering what to do about its London listing and whether its Paris trading facility can be expanded, but since it has not filed accounts for 2006, 2007 or 2008 (year to June)it may have difficulty in achieving anything in the near future.

The accounts for both 2006 and 2007 have been prepared but we understand that there is a problem between ZCCM’s board and the company’s auditors regarding certain balance sheet asset valuations. The 2006 accounts are promised in a few weeks, not a new promise unfortunately. Following the publishing of the 2007 accounts it would be possible for ZCCM shares to be elevated to the next rung of Paris trading where there would be continuous session trading rather than the unreliable and quixotic daily call over on the Marche Libre. Whilst the market in ZCCM shares would remain thin in the circumstances of continuous trading, it would, nonetheless, be reasonable to expect daily volume to rise from a few thousand shares at best via the present calling-over facility, to around 50,000, which would be equivalent to around 100 per cent turnover of the minority stake annually.

Another issue that remains unresolved is the level of ZCCM’s debt, which stands at around US$500 million. This all relates to its past role as the operator and owner of Zambia’s copper mines. Whilst this figure appears on the face of it to be an enormous burden to ZCCM in its present reduced circumstances, it needs to be borne in mind that the debt is almost entirely attributable to the Zambian government, and it carries neither repayment date nor interest rate. There are some at ZCCM who believe that since the Zambian government has had most of its foreign debt forgiven by the international community, the Government in turn should cancel ZCCM’s debt. This the government refuses to do, but it has intimated to the company that it would consider converting the debt into preferred capital, which would carry a right to convert into new ZCCM equity. Some of this new equity could then be sold to local and foreign investors to raise cash for the government. ZCCM’s proposals on this have been with the government for over a year now and an early resolution of the issue seems unlikely!

The company has been talking to a group of French investors, the first time it has ever acknowledged the existence of its 13 per cent largely private investor minority. Whilst these discussions have been wide ranging they have laid particular emphasis on matters of investor relations and communications, where ZCCM is very weak. The company has engaged a South African IR firm to do an audit of ZCCM’s current IR practices, such as they are, and make recommendations. This is not the first time that an IR audit has been performed and it is unlikely that the South Africans will come up with anything that is not pretty clear already to the French ginger group.

Whilst is also pretty clear is that ZCCM is being right royally shafted by its foreign partners on the issue of dividends from the Copperbelt mines, the company unfortunately lacks aggressive and motivated management, which doesn’t help. For many years now its staff have acted as administrators dealing with issues, such as pensions, relating to its historic position as operator of the Copperbelt mines. ZCCM is anxious to develop its role as an investment holding company and to manage its current assets. Therefore the imperative now is for ZCCM to strengthen its management in order to fulfil these ambitions.

At the same time the Zambian government is prone to drag its feet and has recently said that it has no intention of selling a share of its 87 per cent holding, even though locals have suggested that this would reinvigorate its practically dormant local quote on the Lusaka Stock Exchange. This refusal, which goes against previous government policy to realise value from the ZCCM stake at the right time, also creates problems with regard to the debt issue and the proposed preferred share swap and subsequent sale.

There is clearly considerable and uncaptured value in ZCCM, but the company lacks good investment banking advice, if that’s not an oxymoron in today’s world! Publishing the 2006 and 2007 accounts is a minimum requirement for starting the revival process; a regular flow of dividends in respect of ZCCM’s minority Copperbelt holdings and action on the debt issue would also materially help. At the moment ZCCM gives the lie to those who believe that the time has come to make ‘shedloads’ of money investing in African companies.

Magande pretending not to negotiate

I will write a more detailed blog on last weekend's MineWatchZambia conference in due course. The conference is already making waves in Zambia.

The Post reports a debate between Professor John Lungu of Copperbelt University and Finance Minister N'gandu Magande. Lungu claimed in a paper prepared for the conference and posted on this site, that the decision on the exact shape of the mines tax regime and whether to completely cancel the development agreements (DAs) would only be reviewed after next month’s presidential elections.

Magande responded that the government had not deferred the collection of taxes, claiming that government was "still collecting the 25 per cent windfall tax from the mining companies in line with the new mining fiscal regime." In defiance of media reports reviewed in this blog over the last week he is reported as saying, “Deferring the tax…what do you mean? We are still collecting. It is not correct to report that the government had deferred the collection of the windfall tax.”

That position would be defensible 1) if it were true that they were still collecting (I don't have evidence beyond what's in this blog but that seems unlikely) and perhaps more importantly 2) if it weren't that the legislation put through Parliament mandated quite different rates to those being applied. 25% is clearly a concession made to the companies, initially in a letter to First Quantum, previously reported in this blog, and possibly now extended to all companies. Unless the LME price for copper has been averaging below $6,614/tonne (it hasn't - see below), this rate is simply not in line with the new legislation.

The Post also notes that Magande is directly contradicting claims by Secretary to the Treasury Evans Chibiliti a couple of weeks ago that only two out of the eleven mining companies had paid windfall taxes. Chibliti added that those who had paid had done so unwillingly, as they insist on further negotiations on the new tax regime with the government. Similarly the Economics Association of Zambia (EAZ) recently predicted that the government may only collect around US $200 million from the mines owing to the low compliance levels exhibited by the non-payment of windfall taxes.

Clearly there are negotiations ongoing over a retreat from the originally-announced regime. In the legislation passed by Zambia's sovereign parliament there are three reference prices for the rate at which the windfall tax will apply mandating rates of 25%, 50% and 75%. These are a monthly average price on the London Metal Exchange of:
5512 US dollars per metric tonne results in windfall taxation of 25% on income above the trigger price.
6614 US dollars per metric tonne results in windfall taxation of 50% of income above the second trigger price.
7716 US dollars per metric tonne results in windfall taxation of 75% of income above the third trigger price.

(The original legislation is here). Copper is currently trading at around the 7000 $/tonne mark. This is as low as it has been since the legislation was in place. Prices here and here suggest that the rates applied should have varied through this period between 75% and 50%.

So where are we at? Lungu argues in his paper, “Having taken a unilateral decision, it was expected that the mining companies would take legal action. This has not happened yet. The mining companies are only waiting for the time when the government will invite them for negotiations... While some companies have paid the taxes, others are still waiting to see if the government can open up to negotiate. This time, however, the government has an upper hand. They have demonstrated to the mining companies that they are able to take decisions. This however does not seem to be the ending. The situation will become clearer after October 30th 2008, when a new government comes into power whether headed by Mr Rupiah Banda or Mr Sata (Michael). At that point, we shall know whether either of them will honour their promises.”

Well, the negotiations have already started. According to who? The companies themselves.

World Mining Exploration News reports that First Quantum Minerals expects Zambia will agree to a compromise on its new mining tax regime in coming months. “We expect to reach a result that everybody is quite happy with,” President Clive Newall told a mining conference sponsored by RBC Capital Markets. Newall is reported as saying that the recent death of Zambia’s president is expected to delay slightly a new tax agreement. In deirect contradiction of Magande, the paper reports, "In the meantime, the Zambian tax authorities have suspended collecting the new higher taxes."

The Miningbeat blog reports a potential explanation - the Zambian government might be prepared to reconsider the new levels of mining tax that it’s imposing, if the government’s own 87 per cent owned Zambian Consolidated Copper Mines (ZCCM) started to receive meaningful dividends from its Copperbelt joint ventures. I will post much more on this fascinating and very detailed blog in my next message. All we can know for now is that a lot more transparency about any talks would be very welcome.

Companies cheating on tax, EAZ lobbies to withdraw windfall tax

A masively significant report in The Post on Tuesday - reproduced in full below. I would suggest reading this alongside the presentations from Profs Saasa and Lungu and Dr Miles Larmer for the MineWatchZambia conference. One comment from me for the moment. It is hard to accept the argument, which I think I detect below, that because the companies are not complying with the law, the law should be changed. I will try to get and paste a copy of the EAZ's original evidence.

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GOVERNMENT will only collect US$200 million of the projected US$415 million from mineral taxes owing to low compliance levels among mining companies, the Economics Association of Zambia (EAZ) has predicted.

And EAZ has proposed a replacement of windfall tax for mining companies with either the variable profits tax or revenue-based tax regime.

According to a presentation made to the parliamentary committee on estimates last week, EAZ stated that the government would only collect about US $200 million from mine taxes this year, claiming that only Kansanshi Mines Plc had paid windfall taxes.

“ZRA reports that it has collected about K325 billion (about US$95 million) so far this year. This would be about half the rate anticipated in the budget – that is, government would collect about US$200 million, instead of the targeted US$415 million,” EAZ predicted. “The main reason appears to be non-payment of windfall tax, with only one company, Kansanshi, having paid windfall tax so far. The non-payment appears to be due to complaints by the companies about the new tax regime.”

EAZ however, emphasised that the government should ensure mining companies pay the revised taxes promptly and in full.

Secretary to the Treasury Evans Chibiliti last week told a parliamentary committee on estimates that only two out of the 13 mining companies in the country had paid windfall taxes. Chibiliti disclosed that the two companies who had paid windfall taxes amounting to K109.5 billion, did so under protest, meaning they (companies) could seek legal redress that could result in restoration of their privileged rights enshrined under the defunct Mining Development Agreements.

Most mining companies are said to have had cash flow problems emanating from high production costs. There is however a 100 per cent compliance from all mining companies in payment of other taxes relating to mineral royalties (charged at three per cent) and company tax (30 per cent).

During the second quarter of 2008, a total of K255.6 billion was paid in mining taxes of which windfall taxes stood at K109.5 billion, company tax at K105.1 billion and mineral royalties’ contribution stood at K41 billion.

And EAZ has proposed the replacement of the windfall tax introduced last April with a variable profits tax which would consider the cost structures of companies or the revenue-based tax regime.

“It is reasonably clear that the windfall tax, as presented in the 2008 budget, is likely to result in much higher tax rates than those intended and will deter new investment,” according to EAZ. “Government should seek to replace it as soon as possible by either the variable profits tax which would consider the cost structures of companies or structure the revenue based tax regime in such a way that the windfall tax will only apply from a price level which takes into consideration the cost structures of companies.

“The windfall tax should also be a flat rate. Thus the government should in the meantime re-examine the issues of tax deductibility, as well as the price thresholds and tax bands in the current legislation. In return, the mining companies should pay the revised taxes promptly and in full.”

EAZ stated that there was need to strengthen and accelerate the capacity of Zambia Revenue Authority (ZRA) to review the profitability of mining companies in the country.

It however, emphasised the need for the government to expedite its plans to join Extractive Industries Transparency Initiative (EITI), which commits mineral-rich countries to disclose earnings from natural resources.

“Much of the difficulty and, indeed, suspicion surrounding mining company representations reflects concerns that they are exaggerating their costs and thereby reducing the potential tax take if taxes are based largely on profits.” stated EAZ. “We understand that ZRA is in the process of building up its capacity to review mining company tax returns critically, and would strongly encourage that this be accelerated.

In addition, we believe that Government should seek independent audits where necessary. “The EITI, as an internationally supported mechanism, appears to have started to help countries such as Nigeria to address issues of transfer pricing in their extractive industries. The initiative is at an early stage in Zambia, and should be pursued with vigour.”

EAZ also urged the government to re-evaluate the impact of new mining tax on further investments, arguing that the association of local economists was also concerned that the new mining fiscal regime does not provide the stability and predictability needed to sustain investments in the sector.

“While we support the intention of the new tax regime, we are concerned that it does not yet provide the stability and predictability needed to sustain investment in the mining sector,” it stated.

“Therefore, the government should review the impact of the new regime on new investment, especially on greenfield investments, like Lumwana, but also on those being carried out by existing mines.”

Chiefs and Mining

Another story in The Post today hints at the increasing role of chiefs in asserting local people's needs and perspectives in relation to new mines.

Chief Chisunka fears dishonesty in mines ministry

CHIEF Chisunka of Mansa has expressed disappointment with the Ministry of Mines over its delay in issuing Zamanita a licence to mine manganese in his chiefdom.

In an interview, chief Chisunka said he was under pressure from his subjects on the issue of a licence for Zamanita because it gave them a ray of hope for employment opportunities.

He complained that he discussed with the mines minister, Dr Kalombo Mwansa, area member of parliament Besa Chimbaka and Zamanita director Diego Cassilli and was assured by Dr Mwansa that he would soon get back to him on the issue.

"Unfortunately, Kalombo Mwansa has not gotten back to me. I have a lot of respect for that man, but I am disappointed with him," chief Chisuka said.

"People are coming to me to ask what is happening about the issue because when I discussed with the minister, I assured my people that Zamanita will at least offer them some employment."

Chief Chisunka accused the Ministry of Mines of being crooked and having a preferred Chinese investor whom they wanted to issue a licence for mining manganese.
He said people in his chiefdom would resist any form of crookedness aimed at imposing an investor whom they did not want at the expense of Zamanita who already had the equipment as well as land for mining purposes.

Chief Chisunka urged Dr Mwansa to come out clean and explain why his ministry did not want to give a licence to Zamanita.

"We hear that they want to combine the land for Zamanita and Alpha another firm that has got a prospective mining licence to some Chinese investors," said chief Chisunka.
Mwansa when contacted responded: "I have no comment because the matter has not been decided yet".

MineWatchZambia Conference Papers Available Online

The first Mine Watch Zambia conference starts on Friday. There is a link on the front page of the minewatchzambia.com website, or you can go direct from here to a new section which contains a number of the papers and presentations. More will follow. I would invite readers who can't make it to discuss the conference or any of the individual papers on this site. I'll blog on the conference once it's happened.

New investments?

Another one picked up from Cho, who asks whether the announcement of massive new Chinese investments in Luapula and Northern Province is the real deal (huge news if so), or whether the timing of the announcement has more to do with impending elections on October 30th, and the MMD's desire to recover vital territory from PF.

One week to first MineWatchZambia conference

The agenda is posted below. Please do feel free to publicise this event to all of your networks and contacts. You can register to attend at:
http://www.politics.ox.ac.uk/research/conferences/

Mine Watch Zambia Conference
Politics, economy, society, ecology and investment in Zambia

Fri 19 - Sat 20 September 2008

Seminar Room G - Department of Politics and International Relations, Manor Road, Oxford Convened by Alastair Fraser: alastair.fraser@politics.ox.ac.uk/ www.minewatchzambia.com

FRIDAY 19 SEPTEMBER

10:30am Registration

11:00am PANEL 1: INTRODUCTION – LOCAL IMPACTS, GLOBAL RELEVANCE

Professor John Lungu: Economics and Management, Copperbelt University: The politics of reforming Zambia’s mining tax regime

Chair: Alastair Fraser, Politics and International Relations, Oxford

12:30pm Lunch

13:30pm PANEL 2: THE MINING BOOM IN HISTORICAL CONTEXT

Dr Miles Larmer, History, University of Sheffield: The Political Economy of Two Copperbelt Mining Booms

Tomas Frederiksen, Environment and Development, University of Manchester:The Spatial Politics of Mining on the Zambian Copperbelt 1900-2008

Chair: Dr Jan-Bart Gewald, History, Africa Studies Centre, University of Leiden

15:00pm Coffee

15:15pm PANEL 3: THE MINING BOOM IN SOCIAL AND CULTURAL CONTEXT

Dr Marja Hinfelaar, National Archives of Zambia: “Where Mammon Reigns": The Roman Catholic Church's response to industrialization in Northern Rhodesia's Copperbelt, 1930s-1960s

Rohit Negi, Geography, Ohio State University: ‘We are the implementers of development’: Chiefs, Capital, and Politics in Solwezi

Chair: Dr Tom Young, African Politics, SOAS

16:45pm- 18:15pm PANEL 4: INTERNATIONAL CAMPAIGNS AND GRASSROOTS RESISTANCE

Abi Dymond, Policy Officer, SCIAF: The impact of local and global NGO campaigns on Zambian Government mining policy

Simon Chase, Policy Officer, ACTSA: Vedanta/KCM: The responses of a multinational to popular and international campaigns

Rozemarijn Apotheker, International Development, University of Amsterdam: Mineworker perspectives on Corporate Social Responsibility and the tax debate

Leonie Ratty, Development Studies, SOAS: Mineworkers, Democracy and the rise of populism in Zambia

Chair: Professor James Scarritt, Political Science, University of Colorado at Boulder

18:30pm Conference Dinner , The High Table, Eastgate Hotel, High Street

SATURDAY 20 SEPTEMBER

9:15am CHINA IN ZAMBIA 1: ATTRACTING AND REGULATING INVESTMENT

Professor Ching Kwan Lee, Sociology, University of California, Los Angeles: Out of Precariousness: Politics of Casualization in Chinese Enclaves in Zambia and Tanzania

Dan Haglund, Economics and International Development, University of Bath: Regulating FDI in weak African states: a case study of Chinese copper mining in Zambia

Dr Peter Kragelund, Trade and Development, Danish Institute for International Studies Knocking on a wide open door. Chinese investment in Zambia, and responses to it

Chair: Dr Lyn Shumaker, History of Science, Technology and Medicine, University of Manchester

11:00am Coffee

11:15am CHINA IN ZAMBIA 2: LABOUR AND CASUALISATION

Jonathan Elliot, Independent Filmmaker, Elliot Productions: A short video on conditions inside Chambishi plant and the mining tax debate

Janie Whitlock, African Studies, University of Oxford:Digging for Prosperity: Mining and Labour practices in Chambishi, Zambia

Andrew Brooks, Geography, Royal Holloway, University of London: Chinese Capital Investment, Labour Relations and the Production of Meaning at Zambia-China Mulungushi Textiles

Chair: Dr Adrienne LeBas, Politics, University of Oxford

12:45am Lunch

13:45pm CHINA IN ZAMBIA 3: MANAGING TRADE

Jacqeline Musiitwa, Central Michigan University: An evaluation of the China-Zambia economic and trade cooperation zone

Colin Groshong, Comparative Government, University of Oxford: The local politics of the new trade co-operation zone

Hugo Knoppert, Cultural Anthropology and Development Sociology, University of Leiden: From ‘Made in China’ to Sold in Zambia: The influx of Chinese products in Zambia

Chair: Dr Nic Cheeseman, Politics, University of Oxford

15:15pm Coffee

15:30pm CONCLUSION: AFTER LEVY - MINING IN ZAMBIA’S POLITICAL ECONOMY

Alastair Fraser, Politics and International Relations, University of Oxford Back to the future? Mining, planning, populism and development strategy

Professor Oliver Saasa, International Economic Relations, Premier Consult Ltd Managing the boom: impacts on state and national developmental strategy

Chair: Professor Jeremy Gould, Development Studies, University of Helsinki 17:00 Ends

REGISTRATION: Participants will be asked to contribute £25 to cover catering costs. (students/unwaged £15) Register online at: http://www.politics.ox.ac.uk/research/conferences. Unfortunately no support is available for travel or accommodation costs of participants. More information on both is overleaf.

Video link on tax regime

Another steal from Cho. I've been on holiday and he's been keeping up for all of us... http://zambian-economist.blogspot.com/2008/09/undermining-zambia-revisted.html

Windfall tax in tatters?

Cho writes compellingly on his Zambian Economist blog about ongoing negotiations in the implementation of the windfall taxes. It looks like absolute chaos! I reproduce the whole thing here to save myself time:

"The Daily Mail reports on the puzzling world of the new fiscal regime. The long running saga between the state and the mining companies continues, with the latest announcement that the government has deferred the collection of the 25% windfall tax from mining companies until the discussions which have commenced between the two parties are completed. A negotiable fiscal regime, now that must be a first! Well may be not a first, after all this is how the MFEZs have been implemented - through negotiations, just like good-old-now-discreted-DAs ( no public inquiry into how those were signed yet). Perhaps now is the time for the government to level with the Zambian people and reveal just how they arrived at the new tax thresholds? When is this government going to release the report from "foreign mining experts" they hired to advise us on the fiscal regime, at great cost to the tax payer ? (its been one u-turn after the next, ever since this regime was implemented - see here & here). Excerpt:
Mr Chibiliti said only two mining companies had so far paid the 25 per cent windfall tax out of the total number of mining companies operating in Zambia. “The mining companies made presentations to the late President Mwanawasa on the windfall tax and he asked Minister of Finance and National Planning Ng’andu Magande to review it so we have deferred the windfall tax until a proper assessment is done by the Zambia Revenue Authority,” he said.

Mr Chibiliti, however, said the deferring of the windfall did not mean that Government had cancelled what the mining companies owed the State. He said ZRA would treat mining companies that have not yet paid the tax as defaulters until a comprehensive report was compiled by ZRA. “The mining companies have cited failure to pay windfall tax to high production costs and as Government we are mindful of the impact the high production costs have had on the growth of the mines. This is the reason we have engaged them into dialogue,” Mr Chibiliti said.

He said the three thresholds at which Government had calculated the collection of windfall tax had increased three times than earlier expected thereby causing difficulties to the growth of the mine sector in the country."