Africa-Press – Zambia. My position on Zambia’s mining industry has always been the same. This industry knows no politics and is the main source of our forex in Zambia. The mining industry under ZCCM contributed significantly to Zambia’s development agenda. I have done so many articles on the need to enhance Zambian mine ownership and it’s benefits for Zambia.
I am honestly exhausted and remain tired to lobby for a mining sector that can play a leading in our national development agenda under Zambian ownership. History will definitely recognise me on the right side one day over this issue!
FQM announces a $1.2bn investment and everyone is jumping! On this issue you don’t even need a mining engineer or an economist to tell you the consequences. Just ask an accountant. A tax accountant for that matter. They will tell you the implications.
First Zambia doesn’t make any mining equipment so talking about the multiplier effect in the Zambian economy because of $1.2bn is pure naivety. Most of this money will be spent abroad but a mine in Zambia will have to bear the cost of refunding. Once you inject $1.2bn into a mine, it means no more playing tax because the expense becomes deductible under capital allowance. Mind you in this year’s budget, the period for capital allowance was increased from 5 to 10 years if am not mistaken. In simple terms, copper worth $1.2bn will first have to be mined to payback the $1.2bn before the mine considers paying any income tax! So it is safe to say that we should even forget about thinking of benefiting from high copper prices!
Then the $1.2bn is maybe a loan from somewhere so we also expect the interest payment burden to fall on copper that sits in Northwerstern province. We have seen these billions announced before in Zambia. At Mopani I think it was $1.3bn but no one in kitwe or Mufulira saw that money.
I think we should not be naive. This is 2022. We have a well educated citizenry. But if you look at this from political lenses, you won’t pick anything. Switzerland will continue developing while you continue having kandolo at breakfast.
The illicit financial flows and transfer price plus accounting tricks used to go around tax payments in the Zambian mining sector is far much more than those tuma small corruption cases we pursue against our own citizens! Anyway, who am I really?
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