Zambia may be backing off steeper mine royalty rates -Barrick

Thu Oct 30, 2014 10:44am EDT
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Oct 30 (Reuters) - There are indications that Zambia may be backing away from plans to impose a 20 percent royalty rate on open pit mining in the country, a top executive with Barrick Gold Corp said on Thursday.

"Our sense is that the government realizes that the numbers they have imposed will be very challenging for the industry," Barrick co-president Kelvin Dushnisky said on a conference call to discuss the company's third-quarter results.

"I don't want to handicap anything, but going into this week, our sense is there would be movement away from that number. I can't guarantee it but that's certainly the direction discussions were going," he said.

In his budget speech earlier this month, Zambia's Finance Minister Alexander Chikwanda said the southern African country will increase royalties on open pit mines to 20 percent and on underground mines to 8 percent from 6 percent currently.

Barrick, which owns the large Lumwana open pit copper mine in Zambia, has said that a 20 percent royalty would seriously challenge the economics of the mine. (Reporting by Nicole Mordant in Vancouver; Editing by Meredith Mazzilli)