First Quantum defers $1B Zambia investment
First Quantum Minerals (TSE:FM) is deferring more than $1 billion worth of capital expenditure in Zambia due to a tax dispute with the government.
Africa's second-largest copper-producing country is reconsidering its mining tax in a bid to increase public revenue. According to Reuters, Zambian authorities deemed receipts from mining companies last year to be insufficient.
Matt Pascall, Vancouver-based First Quantum's operations director, told a mining conference that the Zambian fiscal regime contains a great deal of uncertainty, the news agency reported.
He said First Quantum has stockpiled $350 million worth of copper concentrates at its Kansanshi mine in the wake of a 10% export duty on semi-processed copper ore.
"If this chorus against the mining industry continues, it will end up killing the golden goose," Pascall was quoted by the news agency as saying.
The International Monetary Fund said earlier this month that Zambia is seeking its help following an 18% decline in the country's currency and with the value of copper slumping.
The red metal, currently priced at $3.14 per pound, accounts for 70% of Zambia's export earnings.