FINANCING DEFICIT
Mine royalties plan will ′break the back of Zambian economy′
The Zambia Chamber of Mines says the newly announce hikes will lead to famine
Zambia’s plan to increase mining royalties will break the back of the economy in Africa’s second-biggest copper producer and make investment there impossible, a lobby group said. Responding to plans unveiled by finance minister Margaret Mwanakatwe last week to raise royalties by 1.5 percentage points and introduce additional charges for metal exports and imports, the Zambia Chamber of Mines (ZCM) said the measures would "lead to famine". "Let us be clear, these higher tax rates will not result in more tax revenue," Nathan Chishimba, ZCM president, said on Wednesday in a statement. "As industry production shrinks through the impact, there will be less jobs, less taxes … as a result there will be less in the government’s bank account for many years to come." Members of the ZCM include Glencore, Barrick Gold and Vedanta Resources. First Quantum Minerals, which produces more than half of Zambia’s copper, is also in the chamber. Mwanakatwe’s tax increases for copper producers come as the...
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