LUSAKA (Reuters) - Canada’s First Quantum (FM.TO) has delayed investment projects worth more than $1 billion in Zambia due to uncertainty over the fiscal regime in Africa’s second biggest copper producer, a director said on Tuesday.
Zambia plans to review mining taxes to boost government revenue after “inadequate” receipts from the sector last year, Finance Minister Alexander Chikwanda said last week. The southern African nation also introduced a 10 percent export duty on unprocessed minerals.
“There has been a lot of uncertainty in the fiscal regime. First Quantum has either slowed down or postponed over $1 billion in capital expenditure because of this uncertainty,” company director Matt Pascal told a mining conference.
“If this chorus against the mining industry continues, it will end up killing the golden goose,” he added.
Pascal said First Quantum had stockpiled 200,000 tonnes of copper concentrates worth $350 million at its Kansanshi mine after Zambia, which has limited smelter capacity, introduced the 10 percent export duty on concentrate exports.
The affected projects were the Kansanshi expansion and the second phase of the smelter development, which was initially delayed due to technical problems, Pascal told Reuters.
“Once these are resolved the projects will proceed, provided there is certainty in the tax regime,” he said.
He added he believed Zambia had the highest tax rate in the world despite public sentiment that the mines were contributing little to revenue. Mining taxes contributed 18.8 percent to government revenue in 2013.
Reporting by Chris Mfula; Editing by Tiisetso Motsoeneng and Pascal Fletcher