Zambia to hike mineral royalties

The Zambian government has informed the mining companies in the country of its intention to increase mineral royalty tax from the current 0.6 percent to around 3 percent as a way of reaping benefits from rising copper prices, Times of Zambia reported Thursday.

The decision meant to be in line with the prevailing economic trends, the newspaper said.

Finance Minister Ng'andu Magande was quoted as saying that the increment is subject to negotiations with the mining companies.

He said the government is also reviewing other taxes, which firms were exempted from paying when they received mining licenses and the new taxes could be introduced before the end of this year.

The average mineral royalty in the world is about 2.5 percent to 3 percent and that is the margin the government is working on, according to the minister.

He said the new royalty structure will be introduced before the end of the year.

The southern African country is one of the biggest copper- producing countries in the world. Its peak annual output reached 700,000 tons in mid 1970s and then dropped gradually to 300,000 tons in 1990s.

The country started privatization of its copper mines by selling most of the mines to foreign companies to reverse the situation .

Its output has gradually picked up to 440,000 tons in 2005 due to more foreign investment, good management and advanced technology and increased prices in the international market in recent years.

Source: Xinhua