Zambia is reviewing mining tax framework, minister says

Zambia’s mines minister said on Wednesday that the government had been reviewing the mining tax framework with key stakeholders to design a regime that would be stable, predictable and competitive.

“This will also attract both local and foreign investment in mining and ultimately scale up mineral production in the country,” Minister Paul Kabuswe said in the parliament of Africa’s second-largest copper producer.

The mining industry is key for heavily indebted Zambia, accounting for 10% of the country’s GDP and more than 70% of its foreign exchange earnings.

Kabuswe, appointed last month by recently elected President Hakainde Hichilema, gave no details about specific changes the government might make to the tax policy.

Mining companies operating in Zambia have long complained about double taxation in a country where, since 2019, mineral royalty payments are not treated as a deductible expense when calculating corporate income tax.

Kabuswe also said he would report back to parliament about Konkola Copper Mines (KCM) and Mopani Copper Mines after “thorough consultations”, without giving further details.

Zambia took on $1.5 billion in debt to buy Mopani from Glencore in January and is yet to find a new investor for it.

The previous administration handed control of KCM to a provisional liquidator in May 2019, triggering an ongoing legal dispute with its former owner Vedanta.

“The people of Zambia voted for change to protect and better manage national strategic assets such as KCM and MCM,” Kabuswe said.

(By Alexander Winning; Editing by Helen Reid and Kirsten Donovan)