WRAPUP 1-Zambia relaxes tax rules in win for mining companies

Mon Feb 23, 2015 11:57am EST
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* Zambia trying to end rows over royalties, taxes

* Tax change "step in right direction" - mining chamber

* More than 2,000 workers strike at copper mine

By Chris Mfula

LUSAKA, Feb 23 (Reuters) - Zambia on Monday relaxed rules that have prevented $600 million in tax refunds being paid to mining firms such as Glencore and Vedanta Resources , bowing to industry pressure amid disputes over looming job cuts and mine closures.

The country's tussles with miners over value added tax (VAT) as well as royalties have threatened investment and growth in one of Africa's most promising markets and come at a time when copper prices are near 5-1/2 year lows.

Zambia has been withholding VAT refunds from mining companies and other exporters it says have not produced import certificates from destination countries - a step the government had said was needed for transparency but miners argued was impossible because commodities are traded by third parties.

The new VAT rules mean exporters will only have to provide import documentation from transit countries, not the country of final destination.

"This is a step in the right direction," Zambia's Chamber of Mines President Jackson Sikamo told Reuters.   Continued...