Barrick CEO expects deal with Mali on new mining code by year-end
Reuters sources have said that Mali is seeking around $500 million in unpaid taxes from Barrick.
Canada’s First Quantum Minerals (TSX:FM) has scrapped plans to lay off 2,500 workers in Zambia over an increase in mining taxes, and has committed to extend talks with the southern African nation’s government over the issue.
The Vancouver-based said last month it had exhausted all other avenues of cost reduction, adding the job cuts would be implemented in phases during the first three months of 2019.
Zambia, Africa’s second-largest copper producer, increased this year its sliding scale for royalties of 4% to 6% by 1.5 percentage points, and introduced a new 10% tax when the price of copper exceeds $7,500 per tonne.
The miner, however, still plans to reduce its workforce involved in capital projects.
The nation also plans to replace value-added tax with a sales tax by April to help bring down mounting public debt.
“First Quantum will not now proceed with the planned lay-off of any Zambians involved in its production activities,” the miner said in a statement published by local online news site Mwebantu.
The layoffs had been expected to affect 1,250 employees at the Kansanshi mine in Solwezi and 1,250 at the Sentinel operation at Kalumbila.
“Following detailed analysis and after having considered various factors resulting from the new taxes, First Quantum has decided to reduce only those elements of its workforce in Zambia associated with Capital Projects,” the company said.
In 2017, First Quantum accounted for more than half of the country’s copper output, and is the largest individual taxpayer. Mining operations in Zambia, in turn, account for 84% of the Canadian miner’s revenue.
Other than First Quantum, companies operating in the southern African nation include Glencore, Vedanta Resources and Barrick Gold. The latter said earlier this week it’s considering selling its Lumwana copper mine given the “challenging conditions” it’s facing.
3 Comments
allritejack
Once they have decided to tax they will implement it. You may get concessions and promises but when you have undertaken not to retrench they will still tax you. It’s an African country, hence they cannot sustain their high birth rate without taxing productive mining companies.
Jo Ko
It’s not about the birth rate man,it’s about how they utilise their resources. Even after increasing these taxes they’ll still won’t have enough money.
Art Easian
I had this talk with senior Zambians when the development of Zambia was restarting. They wanted to attract exploration to Zambia I said: “Money is like electricity. It follows the path of least resistance. Money will go elsewhere if you do not value it. Tax and royalty policies hurt the poor first.”