Lusaka, Zambia --- MININGREVIEW.COM --- 28 May 2010 - Zambia expects mining revenues to rise to about 30% of the nation's total revenues by 2013 from around 4% last year, after mining firms start making profit.
Finance minister Situmbeko Musokotwane told Reuters in an interview that the current high international metal prices were expected to help foreign mining companies offset carryover losses and meet the threshold to pay company income tax.
Canada's First Quantum Minerals' Kansanshi mine is the only mine in Zambia "’ Africa's top copper producer "’ that is paying company income tax, having completed major expansion programmes and moved into profitable operations.
“Our expectations are that all these other mines, because of high metal prices, will in two to three years be paying more than we projected. During this period, we expect the revenues from mining to rise sharply,” he said.
“We envisage a period when the revenue from the mining companies operating in Zambia will constitute about one-third of the total revenues that we are going to collect.”
Musokotwane said Zambia would not reintroduce the controversial mining windfall tax to preserve growth in the mining sector. “When you tax the revenue and not the profit, you are basically closing the mines,” he explained.
Musokotwane said maintaining the windfall tax of 2008, which the government had scrapped last year, would have led to the closure of some mines and created social unrest in the mineral-rich Copperbelt.