Zambia’s Mopani Copper Mines (MCM), majority owned by London-listed Glencore, will delay the construction of a planned copper processing plant until the government pays it $300 million the firm says it is owed in value added tax (VAT) refunds, the company’s CEO said on Thursday.

Zambia in February relaxed rules that had prevented $600 million in tax refunds being paid to mining firms such as Glencore and Vedanta Resources, bowing to industry pressure amid disputes over looming job cuts and mine closures.

However, the changes only applied to future payments and not money owed.

MCM chief executive Johan Jansen, speaking at a mining conference in Lusaka, said the company’s board had told him to use the estimated $300 million the company was owed in VAT refunds to build the Nkana concentrator.

“So until I get the VAT back for Mopani, this concentrator will be on hold. I wish to make a serious appeal to the government to sort out the outstanding VAT issues,” Jansen said.

The country’s tussles with miners over VAT as well as royalties have threatened investment and growth in one of Africa’s most promising markets.

Zambia has been withholding VAT refunds from mining companies and other exporters it says have not produced import certificates from destination countries – a step the government said was needed for transparency.

Reuters