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Zambia: Lumwana Seeks Clarification
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The Times of Zambia (Ndola)
29 January 2008
Posted to the web 29 January 2008
Ndola
LUMWANA Mining Company (LMC) is seeking clarification from the Government on whether changes to the mining fiscal and regulatory regime in the 2008 Budget will affect the development agreement signed two years ago.
Lumwana managing director, Harry Michael said in Solwezi that his firm wanted to clarify whether the measures would affect the development agreement.
"If the development agreement is intact, then we can continue with our obligations," said Mr Michael, who is one of the vice-presidents at Equinox Minerals, developers of the project.
"We are reviewing our perimeters to see if LMC are affected by the changes, we won't be haste as we wait for confirmations on whether the changes include Lumwana," he said.
Mr Michael said Lumwana and the 12 international banking institutions lending to the US $762 million project, which on completion would become Africa's largest single copper mine, were doing separate internal financial revaluations on the changes.
"We and the international banks lending to the project are doing internal financial revaluations, and in the meantime we are just seeking clarifications from the Government if changes would affect Lumwana," he said.
He said with shareholders having used up their money, the project, scheduled for commissioning mid this year, was now depending on the international banks, which were spending $1.5 million per day.
Finance Minister and National Planning Minister, Ng'andu Magande announced last Friday when he presented the 2008 Budget in Parliament the introduction of a new fiscal and regulatory regime in order to bring about an equitable distribution of the mineral wealth between the Government and the mining companies.
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The move, among others, has seen the Government raise mineral royalty tax to three per cent, peg corporate tax at 30 per cent and introduce windfall taxes to be triggered at different price levels.
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