[miningmx.com] — MINING companies operating in Zambia, Africa’s top copper producer, want the government to appoint independent international auditors to verify whether they are paying all the taxes due, the chamber of mines said on Wednesday.
Investors have been rattled by the doubling of royalties on copper to 6% in the November budget unveiled by Finance Minister Alexander Chikwanda.
The move is part of a wave of resource nationalism sweeping Africa as governments in the world’s poorest continent aim to extract more revenue from the mining industry.
Treasury sources have said the Zambian government opted to hike the revenue-based mineral royalties as a way of collecting more revenue from the mines because it was difficult to implement a profit-based system.
“Some parties have expressed concern as to whether the mining companies are honest enough in their voluntary declarations,” the chamber of mines said in a statement.
“For this reason mining companies strongly recommend that government appoints independent international auditors to carry out compliance audits,” the chamber said.
The previous government had been carrying out audits on the industry to ensure taxes were being properly paid.
Copper accounts for three-quarters of Zambia’s export earnings, but the mining industry contributes only about 10% of tax revenue.
Mines Minister Wylbur Simuusa told Reuters in London last week that the new royalties could be rolled back if copper prices collapsed.
Copper producers operating in the country include Canada’s First Quantum Minerals, London-listed Vedanta Resources and Glencore International AG.