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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.