Zambia’s new President Edgar Lungu has appointed a team to end an impasse with mining firms over higher mineral royalties, his spokesman said on Thursday, in a bid to prevent looming job cuts and mine closures.
Zambia hiked mineral royalties for open pit operations to 20 percent from 6 percent this year, prompting an outcry from the industry and threatening foreign investment in Africa’s second biggest copper producer.
Lungu has shown a willingness to compromise on Zambia’s tax tussles with the crucial mining sector by directing his cabinet to engage with mining firms and saying he would not allow a single mining job to be lost over the disputes.
Amos Chanda said the committee is led by the president’s economic advisor and includes officials from the revenue authority and ministries of finance and mines.
“Mining companies are making recommendations which will be evaluated by the committee and we hope that this matter can be put to rest by the end of this month,” Chanda told Reuters.
Last month Lusaka relaxed rules that have prevented $600 million in tax refunds being paid to mining firms such as Glencore and Vedanta Resources.
Zambia’s rows with mining firms comes at a time when copper demand from big importer China is falling, hurting the southern African nation’s kwacha currency.