First Quantum says optimistic of "rational" Zambia tax

Thu Jun 18, 2015 7:24am EDT
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* Executive calls for tax that will encourage investment

* Zambia has changed mineral royalty tax after sector outcry

By Chris Mfula

LUSAKA, June 18 (Reuters) - Canada's First Quantum Mineral hopes Zambia's government and mining firms will settle on a tax regime that will encourage investment in Africa's No.2 copper producer, a senior executive said on Thursday.

Matt Pascal, First Quantum's director of operations, said although it was "disconcerting" that there had been many changes to Zambia's mining taxes over the last five years, he hoped a common ground between the two parties could be reached.

Pascal said Zambia faced falling ore grades compared with the Democratic Republic of Congo - Africa's top copper producer - and needed to come up with a stable tax regime that would encourage mining exploration and discovery of new ore bodies.

"Zambia needs a lot of exploration. We don't have the ore grades in Zambia that we have in Congo, so it does make it that much more difficult," he told Reuters on the sidelines of a mining and energy conference.

"We are heartened by the fact that the current government has expressed the willingness to talk to the industry and come up with a rational tax going forward that will be conducive to further investments and the sustainability of the mines."

First Quantum last year postponed $1 billion worth of investment in Zambia due to a tax dispute with the government.   Continued...