Lusaka, Zambia — 03 August, 2012 – Canadian-based First Quantum Minerals is planning to invest more than US$4 billion in a new mine and expansion projects in Zambia “’ Africa’s top copper producer “’ in the next two to three years.
First Quantum Minerals head of tax Adam Little told Reuters that more than US$2 billion would go into upgrading the company’s Kansanshi mine, while its new Trident mine would absorb about US$1.7 billion.
First Quantum has been talking to the Zambian government on deals to guarantee policy stability, he said. “It would be nice and would help us with our investment if we could have some assurance for maybe 15 years that the tax rates would be as you see them now,” said Little while on a visit to Zambia.
He also urged the government to reduce mineral royalty taxes, which doubled to 6% last year. “We at First Quantum, and probably the industry as a whole, would prefer the mineral royalty tax to be at a lower level, in the 3 to 4% range,” he said.
On allegations made by Zambian officials that mining companies were not paying their due taxes, Little said the government may have over-estimated copper output.
First Quantum said earlier this week that second-quarter profit had fallen 9% as lower copper prices and higher production costs outweighed higher copper and gold sales volumes.
The company added that its board had approved the Sentinel project in Zambia, part of the Trident project, in May and was ramping up development. Sentinel is expected to produce up to 280,000 to 300,000tpa of copper in concentrate.
The company had some US$900 million in cash and US$1.3 billion of debt as of 30 June. It has budgeted some US$1.2 billion to US$1.4 billion in capital spending for the year as it boosts output at Kansanshi and starts up its Kevitsa mine in Finland.
Source: Reuters Africa. For more information, click here.