Lusaka, Zambia — MININGREVIEW.COM — 15 December 2008 – Zambian President Rupiah Banda has held talks with officials of the Luanshya Copper Mines plc (LCM) over a threat to abandon its copper unit, weeks after suspending building of a new US$354 million (R3.6 billion) mine.
LCM said last month it had suspended building the Mulyashi copper mine for four months from October this year, while it reviewed the copper recovery process and re-examined the project’s viability in view of falling global metals prices.
Chief government spokesman Ronnie Shikapwasha said Zambia was looking to find solutions to the company’s operational problems. “They have problems selling their copper, and we will only know of the other issues affecting their operations once the president briefs us after the meeting,” he told Reuters.
LCM – a joint venture between International Mineral Resources and Ben Stein Group Resources – started to develop the Mulyashi project early this year with plans to reach peak copper output of 96 000 tonnes in the next few years. The company operates the Baluba copper mine and Chambishi cobalt mine, Zambia’s largest cobalt producer.
Foreign mining companies operating in Zambia have been complaining about declining copper prices and the government’s introduction of new mining taxes, including a 25% windfall tax.
Zambia raised mineral royalties to 3% from 0.6% and corporate tax to 30% from 25%, as well as introducing a 15% variable profit tax on income above 8% of total sales. The move prompted threats of litigation by the mines, who accused the government of reneging on development agreements it signed with them to maintain lower taxes.