US says billionaire Gertler’s royalties must go to Congo for sanctions deal
A senior White House adviser said lifting that punishment is necessary to open up the assets to new investments that support US interests.
Zambia has approved a proposal to drop a recent hike in mining royalties as Africa’s second top copper producer seeks to resolve a six-month standoff with miners over the controversial tax increase.
According to Reuters, the government intends to set its mining royalties at 9% for both open-pit and underground mines. In January, the country increased taxes for open pit mines from 6% to 20% and those for underground mines from 6% to 8%, as part of major overhaul to the industry’s tax system announced last year.
The move prompted warnings of closures and thousands of job losses, underscoring a growing trend across the continent, where governments from Tanzania to Guinea are changing tax regimes and adjusting ownership structures to get a larger share of natural resources.
From 1997 to 2013, mining attracted $12.6bn in foreign investment to Zambia, according to industry figures. The capital injection helped the southern African nation become one of the continent’s star economic performers, with average annual GDP growth of 6.4% over the last decade.
Today, mining employs 90,000 people and contributes about three-quarters of the country’s foreign exchange earnings and 25-30 % of government revenue.
But weakening prices are hitting the industry hard. On Monday a World Bank report said weak commodity prices would bring down sub-Saharan Africa’s growth rate to 4% this year, the lowest in two decades.
6 Comments
Gary
History has proved that the government were incompetent running the copper mines themselves during the nationalisation period. Therefore you need to be nice to the people who have the ability to do this
Scotty to Hotty
Zambia still has 68% poverty, where does all the money go??
jitendra
any job in mechanical
jitendra
Hi ,
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[email protected]
Jitendra Garg
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Theuns Zambia
This is the reason my contract with Barrick Gold was not renewed and I was laid off. Lets hope that this means no more Job losses. Now urgently seeking employment
Reasonata
Our continent should be closed..We are too obsessed with high taxes..(Villagers demand i suppose).My country zambia should focus on growth..resulting in more employment and more collection of PAYE…It is through PAYE that most progressive countries collect more taxes…Milking the cow(mine) dry is a primitive strategy .Zambia should completely drop this royalty tax and stick to corporate tax….Another go to zimbabwe ruins i suppose