Zambia adrift over mining laws, foreigners rebel
Zambia’s foreign copper mining companies remain uneasy about the nation’s mining future, despite a rebound in copper prices and government assurances of stable mining taxes in 2010. Zambia has been hit hard by the global recession, which saw demand for Africa’s commodities slump dramatically. But it only has itself to blame, having abolished long-term development agreements it signed with mining companies last year, while raising taxes. South Africa’s controversial mining policy makers would do well to keep their eyes focused on this drama. The Zambians later reversed the taxes to keep mining projects alive following the fall in metal prices, despite (unusual) criticism from the International Monetary Fund and World Bank, who said the country should have kept a 25% windfall tax on minerals. The IMF said Zambia’s mining taxes were extraordinarily low, not just within Africa, but also globally, saying it believed there was room to increase them. But it added that it was up to government and foreign investors to negotiate the taxes. No wonder mining majors are confused.
Read more: Reuters, Lusaka Times