Zambia mines minister says won't reverse mining royalty hike
By Chris Mfula
LUSAKA Dec 30 (Reuters) - Zambia will hike royalty rates on open pit and underground mining from Thursday, its mines minister said on Tuesday, despite industry fears of shaft closures and up to 12,000 job losses.
The decision to increase royalties for open pit mines to 20 percent from 6 percent and those for underground mines to 8 percent from 6 percent has rattled unions and miners and there had been hopes that the government would soften the plan.
But Mines Minister Christopher Yaluma said on Tuesday the government would implement the new royalties system as is when it comes into effect on Jan. 1 because it was in the best interest of the country, Africa's second-largest copper producer.
"It will be negligent of the government to undo what we did. We applied our minds when coming up with the new rates and can't just change because of an outcry," Yaluma told Reuters.
He added that mining companies should come up with clear models showing how their businesses would be hit by the royalties for the government to consider any revision.
Zambia's Chamber of Mines said this month the new royalties would result in shaft closures and 12,000 jobs losses, and may make a number of other operations economically unviable.
The plan has already prompted Toronto-based Barrick Gold Corp. to suspend operations at its Lumwana Copper Mine, which supports nearly 4,000 direct jobs in the area.
Barrick would start closing down Lumwana, which produced around 118,000 tonnes of copper in 2013, on Jan. 1, Mine Workers Union of Zambia President Chishimba Nkole said, adding his 25,000-strong union was deeply concerned about job losses. Continued...