First Quantum Minerals has confirmed that it is in possession of a letter from the Zambia Revenue Authority, noting an assessment for import duties, penalties and interest on consumables and spare parts of 76.5 billion Zambian kwacha.
This is the equivalent of US$8 billion and will hit the company hard if it has to pay considering the company’s operations in Zambia account for 84% of its revenue. The letter is dated 19 March 2018.
First Quantum Minerals’ share price also dropped 13% following the announcement.
The company has also unequivocally refuted this assessment which does not appear to have any discernable basis of calculation and will continue working with the Zambia Revenue Authority, as it normally does, to resolve the issue.
First Quantum Minerals issued a statement in relation to the situation following a news article news article about claims made by the Zambia Revenue Authority regarding underpayment of customs duties.
The statement was issued on behalf of the board of directors of First Quantum Minerals and President G. Clive Newall.
Large mining companies in Africa are taking strain with governments clearly looking to make greater gains through taxes. Acacia Mining was hit with a massive tax bill as it battles forward on doing business in Tanzania under new regulations. Mali is looking to ammend its mining code and the DRC has just passed new law increasing taxes on mines in the country.