The government of Zambia, Africa’s second largest copper producer, said Wednesday it has amended a rule requiring mining companies to produce import certificates from destination countries.
The regulation, which came into force last year, has blocked miners operating in the country from claiming refunds on value-added tax payments, but it will be removed from Sept. 8, Reuters reports.
Today’s announcement, however, may bring close to $600 million back into the pockets of miners such as First Quantum Minerals (TSX:FM), Barrick Gold (TSX, NYSE:ABX), Glencore (LON:GLEN), Vale (NYSE:VALE), and Vedanta Resources (LON:VED), all of which have copper projects in Zambia worth billions of dollars.
Finance minister Alexander Chikwanda said last month the government had decided to relax the rule because it proved very hard to implement, mainly because it involved documentation from importers outside the country’s jurisdiction.
Outstanding refunds should be paid within a year, according to Robert Conrad, professor at Duke University in North Carolina, and Martin Lokanc, a mining specialist at the World Bank in Washington.
