5 February 2013

Zambia: Chibuluma Mine Pays Kr 108 Million in Taxes

CHIBULUMA Mines of Kalulushi paid KR108,9 million in company taxes to Government in 2012 and KR37 million in royalties which represents 53 per cent of its profit.

Chibuluma Mines general manager, Jan Trouw said in an interview that this would increase further in 2013 with new tax changes applicable on capital expenditure.

The mine currently employs 615 people and 28 students with an additional 179 contractors working on the mine.

Chibuluma Mines produced 17,806 tonnes of Copper in 2012 which is about 2 per cent of Zambia's total Copper production and netted a profit of KR157,2 million.

Mr Trouw said operating costs (cost exclusive of capital depreciation) averaged KR18,200 per tonne of copper produced and that the cost inclusive of capital depreciation, royalties and financing costs averaged KR27,731 (US $5,333) per tonne of copper produced.

He said Chibuluma was fortunate in that it incurred lower costs in the production of copper largely due to mining operations taking place at relatively shallow depths and having a higher grade than the other underground and older operations.

"For 2013, at least KR133 million has been set aside for continued expansion of operations, maintenance and exploration activities, with exploration activities taking up KR46 million of this amount.

"It is important for people to understand the real cost of copper production and that issues of capital costs (depreciation) must be considered," he said.

Mr Trouw said the cost of producing copper in Zambia as listed by Woods McKenzie financial analysts showed that the country had the highest cost compared to other major copper producing countries.

The firm spent KR 2,7 million in 2012 on Corporate Social Responsibility (CSR) programmes which included the building of rural school classrooms, improving health service delivery and provision of boreholes, a conservation farming project and supporting local sports clubs.

Mr Trouw said the firm would this year spend KR265,000 to upgrade Kalulushi Modern Stars football club facilities and that KR2,7 million would be spent on CSR.

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