Zambia’s Chamber of Mines said it expects to resolve a $500 million tax dispute between the government and mining companies in Africa’s second-biggest copper producer.
“We’ve made significant progress in that regard,” Maureen Dlamini, chief executive officer of the chamber, said by mobile phone today from Lusaka, the capital. “We’re having constructive discussions.”
Zambia Revenue Authority withheld value-added tax repayments to mines owned by companies including Vedanta Resources Plc (VED) and First Quantum Minerals Ltd. (FM), saying they didn’t comply with rules requiring import certificates from the countries their copper ends up in. The companies have said they sell the metal to traders and don’t know its final destination.
The VAT repayments, which the companies say exceed $500 million, will be withheld until the issue has been resolved, according to Dlamini. Mumbuna Kufekisa, a spokesman for the tax authority, didn’t answer two calls to his mobile or reply to a text message seeking comment.
The Chamber of Mines has also held meetings with Zambia’s energy regulator over a power price increase of at least 29 percent, which companies said in April was unaffordable, according to Dlamini.
“We’ve had a couple of meetings and we’re hoping that it will be resolved to the benefit of both parties,” she said. “It’s early stages in our discussions.”
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