Zambia Halts Export Tax on Unprocessed Minerals for One YearMatthew Hill
Zambia, Africa’s biggest copper producer, suspended a 10 percent export tax on ores and concentrates for almost a year, according to a copy of the legislation.
The government halted the levy until September with effect from Oct. 4, when the statutory instrument signed by Finance Minister Alexander Chikwanda is dated. The suspension, which applies to minerals including copper, nickel, zinc, lead, silver and uranium, comes after mining companies asked the government to waive the tax because of a lack of local smelting capacity.
Zambia imposed the charge in November 2011 as the government sought to boost industry in the southern African country. The tax made exporting copper concentrates less profitable, encouraging mines to use local smelters. Companies including African Rainbow Minerals Ltd., First Quantum Minerals Ltd. and Barrick Gold Corp. have operations in the country.
“African Rainbow Minerals approached the Zambian government asking for the 10 percent export tax to be waived and we are appreciative of the government granting it to us,” Jongisa Klaas, a spokeswoman for the Johannesburg-based company, said in reply to e-mailed questions yesterday.
Copper for delivery in three months was trading little changed at $7,244 per metric ton at 4:57 p.m. in London.
First Quantum Minerals also asked the government to suspend the levy, saying earlier this year it had a copper concentrate stockpile worth more than $100 million that it couldn’t process locally as smelters were full. The company also said the export charge threatened the Enterprise nickel mine it plans to build in the northwest of the country.
“Our aspiration would certainly be to clear that stockpile we have using Zambian smelters,” John Gladston, a spokesman for the company, said today by mobile phone from Lusaka. “We don’t really see a need to export it at the moment.”
Neighboring Democratic Republic of Congo in July raised taxes on copper and cobalt concentrate exports by two-thirds as it plans to ban the practice next year. Some of those concentrates are processed by Zambian smelters.