Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
UKZambians reports Zambia’s Mines Minister Wilbur Simusa says he expects total cooperation from the mining companies as government engages them on taxation and that they should brace for tough decisions ahead, but he added that he does not anticipate resistance.
There is mounting pressure on Zambia’s new president Michael Sata who took office on the promise of improving mining conditions and a bigger share of mining profits for Zambians after protests at a Chinese-owned copper mine earlier this month and a brief ban on metal exports to sort out revenue collection in Africa’s top copper producer.
Sata at times also employed fierce anti-Chinese rhetoric while in opposition and his first meeting since taking office was with the Chinese ambassador to dispel fears over shifts in investment policy.
UKZambians quotes Simusa as saying as soon as the PF government has settled down, it will ensure that it enters into discussions with the Chamber of Mines.
In June, before the new government came to power MINING.com reported the Zambian Finance Minister mocked Zimbabwe and South Africa for planning to forcibly raise government stakes in foreign mines during a BBC-organised debate on Africa’s benefits from mining, saying “the Zambian miner in 1970s was a happier miner than a miner during the period of state ownership of the mines.”
MINING.com reported on 8 October Rio Tinto’s Zimbabwe subsidiary Murowa Diamonds has ceded 51% of its equity to comply with a new law that requires Zimbabweans to own the majority of foreign companies calling it a pyrrhic victory for President Robert Mugabe as giving up control means Rio would probably not go ahead with a proposed $200 million expansion at the mine.
2 Comments
Mochi
Sata will destroy the industry given the chance, his head is spinning and he needs to settle down.If he doesnt put thought behind what he decides, no investment, high taxes will mean mining will reduce or finish. The people of Zambia are short sited, Sata wont give the money to the people – it will go in the pockets of the top 10% as per normal wake up Zambia!
BretMaverick
The next step should be a reasonable dialogue with the Mining Companies to work out a proposition that serves both sides. This should be backed up by a solid plan to help miners, their families and the Zambian people. The proposition must be attractive to both the investor’s side and government’s side – and the government must be seen to be acting FOR the people.