UPDATE 3-Barrick will not suspend copper mine as Zambia backs down on royalties

Thu Apr 23, 2015 4:19pm EDT
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* Barrick says will continue operations "at this time"

* Cabinet sets mining royalties at 9 pct

* Corporate income tax for mines set at 30 pct

* Vedanta's Zambia copper unit will still lose money -CEO (Adds confirmation from Barrick, statement from co-president)

By Chris Mfula

LUSAKA, April 23 (Reuters) - Barrick Gold Corp, the world's biggest gold producer, said on Thursday it will not suspend operations at its Lumwana open-pit copper mine in Zambia now that the country's government has reduced mining royalties.

Zambia's cabinet set the royalty tax rate for open-pit and underground mining at 9 percent on Monday. The corporate income tax rate will be 30 percent and the mineral processing tax rate will be 35 percent when the law takes effect on July 1.

"We appreciate the leadership and engagement of President (Edgar) Lungu and the government of Zambia on this matter," Barrick Co-President Kelvin Dushinsky in a statement. "While Lumwana still faces challenges, in light of the government's recent announcement we intend to continue operations at this time"

The changes are yet to be approved by the parliament in Africa's second-largest copper producer, but are expected to receive support from the assembly.   Continued...