[miningmx.com] — ZAMBIA, Africa’s top copper producer, will not re-introduce a mine windfall tax it abolished in 2009 as such a measure could harm mining operations and negatively impact the economy, finance minister Alexander Chikwanda said on Wednesday.
“It would be unwise for the government to introduce a windfall tax when metal prices are unstable and are usually trending downwards,” Chikwanda said in a statement.
Zambia doubled royalties on copper miners in the 2012 budget and the World Bank said that would not cripple the industry at the current strong prices but could cause problems if the commodity cycle reverses.
Zambia in 2008 raised company income tax from 25% to 30%, raised the mineral royalty to 3% from 0.6%, introduced a 25% windfall tax and separated hedging income from mining income for tax purposes.
But following protests from mining companies, the government in 2009 abolished the windfall tax.
Foreign mining firms in Zambia include Brazil’s Vale, Canada’s First Quantum Minerals, Barrick Gold, London-listed Vedanta Resources and commodity giant Glencore.
