(In U.S. dollars, unless noted)
TORONTO, May 29 (Reuters) - A new Zambian tax plan could cut into the profits of Canadian miners operating in the country, including First Quantum Minerals (FM.TO) and Equinox Minerals EQN.TO, RBC Capital Markets said on Thursday.
The African country said this week its windfall mining tax regime -- which starts at 25 percent -- would kick in at copper prices above $2.50 a pound. Three-month copper MCU3 was around $3.60 a pound on Thursday.
"The overall impact of these changes is very negative," RBC analyst Fraser Phillips said in a research note.
"They are likely to cause significant reduction in profits, particularly in times of high metal prices."
Zambia had previously said it will raise mineral royalties to 3 percent from 0.6 percent and boost the corporate tax on miners to 30 percent from 25 percent.
First Quantum has said its Kansanshi copper mine is already covered by an investment agreement, and that it hopes to reach a settlement with the government. Equinox, which is developing the Lumwana copper mine, also has a development agreement.
Phillips pointed out the act states that all existing agreements will cease to be binding.
The tax changes have already bitten into shares of the companies, but he said there could be further selling, depending on the outcome of the negotiations.
First Quantum stock was down 80 Canadian cents at C$76.70 on the Toronto Stock Exchange on Thursday, while Equinox was down 3 Canadian cents at C$4.62. ($1=$0.99 Canadian) (Reporting by Cameron French; editing by Rob Wilson)