Bloomberg News

Zambia to Seek Bigger Share of Mine Projects, Minister Says

October 13, 2011

Zambia plans to boost the size of its stakes in mining projects in Africa’s largest copper producer and hasn’t decided yet how much it wants to own, Mines Minister Wilbur Simuusa said.

“Whatever measures we will take as government, we shall make sure they do not resemble anything close to nationalization because we have gone down the nationalization path before, and it has not worked for us,” Simuusa said by phone today from the capital, Lusaka.

President Michael Sata’s government is seeking a partnership with foreign mining companies and any changes will be in consultation with them, he said.

Sata defeated incumbent President Rupiah Banda in an election last month after pledging to fight corruption and spread the nation’s copper wealth more fairly. In the three weeks since taking office, he has fired the central bank governor, the heads of state utilities and the revenue service and temporarily halted metal exports. Companies operating in the southern African country include First Quantum Minerals Ltd. (FM), Vedanta Resources Plc (VED) and Glencore International Plc. (GLEN)

Zambia’s plans to boost tax revenue won’t harm the mining industry, First Quantum Chief Executive Officer Philip Pascall said in an e-mailed statement today. The company is “confident” its investments in Zambia are safe, he said after meeting with Sata in Lusaka.

On Hold

The Cabinet would make the decision on what the government wanted from mining companies, Simuusa said.

“To say that we want to own a 30 percent to 35 percent stake in the mines is wrong because nothing has been agreed upon yet,” he said. Reuters reported today that the state wants to increase its share of foreign-owned mining projects to at least 35 percent, citing Simuusa.

The government put on “hold” a requirement that metal exports must be certified by the central bank before shipping, Simuusa said. Exports can take place without being certified while the bank works on the rules, which should be ready in “about a month or so,” he said.

Sata announced on Sept. 30 that all exports must first be checked by the Bank of Zambia to help verify what was being taken out of the country. He later issued a ban on all metal exports before lifting it two days later.

Strikes at some mines must stop because they may reduce production and discourage future investment, Simuusa said.

“As government we would like to appeal for calm and patience among workers who are clearly in a hurry to have more money in their pockets,” he said.

Workers went on strike at a mine operated by Chambishi Metals Plc, majority owned by China Nonferrous metals Co., for higher wages today, according to Radio Phoenix.

Zambia’s kwacha was 0.1 percent weaker at 4,960 per dollar at 4:25 p.m., Lusaka time.

To contact the reporter on this story: Anthony Mukwita in Lusaka at amukwita1@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


Toyota's Hydrogen Man
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus