It's not just the DRC govt. that wants a bigger slice of the pie.
Zambian Govt Wants To See Mining Cos' Accts In Tax-rule Spat
19 February 2008
Source: Dow Jones International News
The Zambian government has asked mining companies which bought assets of the former state-mining company, Zambia Consolidated Copper Mines, to prepare income and expenditure accounts since they took over the mines, a government official said Tuesday.
Speaking by telephone from the Zambian capital, Lusaka, an official with the Ministry of Finance and Planning told Dow Jones Newswires that the government has written to companies asking them to prepare their accounts as the two sides prepare to meet on the government's plans for new tax rules. He couldn't give a date for the proposed meeting. The official also said the government expects a response from companies in the next few days.
The official said the intention of the request is to show that the new tax regime won't make investments in the sector unprofitable. The government is also in the process of compiling its own data using its investment company, Zambia Consolidated Copper Mines Investments Holdings, which retained minority stakes in former properties of ZCCM.
Zambia's new tax regime is expected to be implemented from April 1, subject to parliamentary approval.
Director of the Chamber of Mines Fredrick Bantubonse has said the proposals pose a danger to investment in the mining sector because they disregard development agreements signed with companies.
Zambia completed privatizing its vast copper mines in 2000, and government officials say that because global copper prices were low at the time a wide-range of incentives were extended to companies which took over ZCCM mines. However, since 2004, copper prices have recovered and government now wants a fair share.
Bantubonse says that some companies have invested heavily in the sector and have had poor profits since the late 1990s, most companies started making reasonable profits in the last couple of years and a new tax regime would hurt their investments.
Companies operating in the country include First Quantum Minerals Ltd.(FM.T) Vedanta Resources (VED.LN), Equinox Minerals (EQN.T), Metorex Ltd, (MTX.JO) Albidon Ltd. (ALB.AU) and Glencore International AG.
Zambia is Africa's leading copper producer with 2008 output expected to be 750,000 metric tons.
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