First Quantum will invest $1.5 million to advance exploration work at the Orquideas and Cascas assets in the first year, with the option of investing an additional $37 million over the course of the subsequent four years covered by the deal.
First Quantum Minerals Mining News
First Quantum said that Zambia's tax agency had demanded the taxes, saying they were on import duties, penalties and interest on consumables and spare parts.
Copper production will peak in the second half of 2019, making a growing supply deficit much more real.
A lack of returns to governments is drawing a backlash from Mali in the Sahara to Tanzania on the Indian Ocean.
Zambia Revenue Authority claims the company owes $2.1 billion in penalties and $5.7 billion in interest.
ZCCM-IH launched action in Oct 2016 to sue First Quantum over claims that the company borrowed $2.3bn from copper mining subsidiary without informing them.
Deal valued at $635 million.
Zambia's state power company made the decision amid an ongoing dispute over the implementation of new electricity tariffs in the country.
Cobre Panama project is now 50% complete and on track to produce 320,000 tonnes of copper in 2019, making the company one of the world’s top six producers of the red metal.
So far, copper prices have failed to react significantly to news of supply disruptions, remaining more responsive to news from China, the world’s largest consumer.
The Vancouver-based miner aims to produce 280,000 to 300,000 tonnes of the red metal a year, but commercial levels won't be reached until state power utility Zesco finish connecting the mine to the power grid.
Power restrictions could hit output of most copper mines operating in the country.
The government intends to set its mining royalties at 9% for both open-pit and underground mines.
But the fund warned that only further tightening of fiscal and monetary polices would contain the country's large deficits.
The new rules only apply to future payments and not amounts already owed.
Newly elected President Edgar Lungu wants to keep mining royalties at 20%, as opposed to the 6% companies were paying a month ago.
The situation may soon change, as authorities have began talks with the country’s top miners, signalling the possibility of a compromise over the country’s new tax regime.
Copper tumbled Wednesday to fresh six-year lows, dipping below $5,500 a tonne. Stocks in miners of the industrial metal are getting hammered.
Despite the government announcement Tuesday that it will push ahead with plans to more than triple mining royalties.
Move will leave up to 12,000 jobless and it is likely to sour the already fractious relationship between the government and mining companies.
Underground mining royalties will go up from 6% to 8%; underground taxes now 20%.
Zambia’s mines minister says the company has not officially communicated the government its intentions as required under the country's law.
The company is cutting 169 jobs at the mine.
The standoff marks a major setback for the miner, which is in the process of upgrading its copper assets in Zambia hoping to increase output by at least 50% by 2017.
The business group argues the sector must be nurtured to generate the revenues needed for the country’s economic diversification.