The country' Supreme Court ruled Monday that Law 9, used to grant the mining concession for Cobre Panama copper project, was unconstitutional.
First Quantum Mining News
The new measure will affect global mining firms including First Quantum Minerals, Glencore, Barrick Gold Corp and Vedanta Resources which currently pay a flat rate of 9.30 cents/kWh.
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.
Northern Dynasty stock drops 32% after pact with First Quantum to build giant Alaska copper-gold mine collapses.
Copper production will peak in the second half of 2019, making a growing supply deficit much more real.
Zambia Revenue Authority claims the company owes $2.1 billion in penalties and $5.7 billion in interest.
Shares of First Quantum fell as much as 13 percent in Toronto and were down 12 percent when the stock was halted ahead of the statement.
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.
African gold miner comes out on top.
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 Chamber of Mines wants the government to reconsider its decision to hike corporate income tax rate on mineral processing from 30% to 35%, which came in effect July 1.
The move puts an end to a nearly nine-month standoff that has hit output and profits in Africa’s second largest copper producer.
The country's national pension fund has bought 15.9 million shares of Zambia's Consolidated Copper Mines-Investment Holdings for almost $80 million.
Mines minister Christopher Yaluma said reducing royalties below the recently revised 9% would make underground mining more cost effective.
The announced changes will be effective on July 1, once parliament has approved them.
The government intends to set its mining royalties at 9% for both open-pit and underground mines.
Government claims it was not notified according to the law.
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.