Zambia to reduce underground mining royalties

Zambia is considering further reducing the mineral royalties for underground mines below the revised 9 percent, state broadcaster ZNBC reported, attributing the comments to the mines minister.

Christopher Yaluma was reported by the broadcaster as saying that reducing royalties would make underground mining more cost effective but the ZNBC did not give further details.

Yaluma is currently in Japan and other government officials reached by Reuters said they could not confirm the report.

Zambia’s government set the royalty tax rate for open cast and underground mining at 9 percent in April, rowing back from earlier plans to charge as much as 20 percent.

Zambia’s decision to increase royalties for open pit mines to 20 percent from 6 percent and those for underground mines to 8 percent from 6 percent in January had rattled unions and miners, forcing the government to review the plan.

Some of the foreign running firms in Zambia include Glencore, Barrick Gold Corp, Vedanta Resources and Canada’s First Quantum Minerals.

Vedanta Resources’ Konkola Copper Mines, which runs both underground and open cast operations, has previously said it would remain loss-making even under the revised tax regime that comes into effect in July.

Source : Reuters