BUUMBA CHIMBULU writes
THE uncompetitive mining tax regime remained a challenge for the industry as it was prone to constant interfering and change by the previous Government and this should not be repeated by the current administration.
This is according to the Zambia Chamber of Mines (ZCM) president Godwin Beene who reiterated that stability was particularly important for mining, given the long timeframe of the investment.
“There is a range of long-standing challenges, all of which are well known to this Government as they were to the preceding administration. “The main challenge, as I have already said, is our uncompetitive mining tax regime, which was prone to constant tinkering and change by the previous Government,” Dr Beene told the Mining for Zambia magazine.
He explained that people needed to understand that modern mining was a high-risk, complex undertaking, saying there could easily be a 15-year time gap between finding a deposit which was hard enough to find and bringing a mine into production. For years, Dr Beene said, the whole process required billions of US dollars of investment for a large operation, before there was any return at all.
He said it was unfortunate that the constant short term shakedown of the industry to plug some of the gaping holes in the fiscus and that this destroyed trust, thereby making investors extremely wary of Zambia. “Investors need to know that the rules of the game won’t change overnight, which throws out their calculations entirely,” he said.
“You have to give people the confidence that if they are investing in our country for the long term, over many decades, that we won’t turn on them once they’re committed. “If we do, you can be sure that all other potential investors will sit up and take note, and either go somewhere more inviting, or demand a higher premium for a country they now judge as having high political political risk.”