As Africa’s red metal producer grapples with 700MW energy deficit which has adversely impacted copper productivity, which the state intends to plug with power imports the Chamber of Mines has proposed that energy tariffs be inflation linked for the next 3 years until the cost of service study completes, Chamber President Goodwell Mateyo revealed as he shared the proposals made to the 2020 budget.
Mateyo further echoed a new tariff evolution roadmap to be agreed with the full participation of industry and ZESCO to understand its working capital, restructuring and financing needs.
“Ultimately, Zambia needs a joint approach to growing the mining industry, based upon a shared understanding that through growth – and only through growth and industrial development – can we deliver more,” said Mr Mateyo.
Commenting on the Chamber’s submissions, First Quantum Minerals’ head of government affairs John Gladston said the most important elements of making Zambia competitive was stability in the tax and royalty regime; stability in major costs such as electricity or fuel; and stability in labour.
“Mines across the world need constant investment; in hardware, exploration, and modernisation. When the global economy presents challenges, whether as part of a global financial crisis or through the so-called commodity super-cycle, it falls to governments to make their jurisdictions the most attractive in which to place investments – this means low taxation to encourage further investment,” he said.
Mr Gladston further said that fundamental to long-term private sector investment was knowing what the costs would be for the life of the investment, and that First Quantum had paid over US$1 billion in tariffs to ZESCO. The predictability of the scale of payments is crucial, he emphasised.
BT
