Glencore unit suspends Zambia copper projects over tax row

by Reuters 10 views0

Glencore-owned Mopani Copper Mines has suspended some of its planned $800 million Zambian copper mining projects.

This is after the government withheld 200 million US dollars in tax refunds, [DATA GLN:Glencore] said on Wednesday.

Africa’s second-largest copper producer is withholding a total of 600 million US dollars in VAT refunds owed to mining firms and will only repay the cash when companies produce import certificates from destination countries, the minister of mines said in June.

Zambian Finance Minister Alexander Chikwanda said in August it planned to waive the requirement because it is impractical. The Zambia Revenue Authority says it is still consulting with exporters before implementation.

(READ MORE: Glencore Xstrata sees copper production growth)

“I would like to express my concern and distress that the continued withholding of our refunds to the tune of 200 million US dollars may force us to slow down progress on these projects,” Mopani’s chief executive, Danny Callow, said in a statement.

“I must mention that some of the projects have since been suspended due to financial constraints and these suspended projects will have a major future impact on our goal to increase copper production by more than 50 per cent,” he added.

Callow said cuts to its 20,000 workforce were possible if it failed to meet growth targets.

Mopani produced 120,000 tonnes of copper in 2012 and has planned to raise output to 170,000 tonnes within five years. The company wants to build two new shafts which it said would add 20-30 years to the life of its Mindola and Mufulira mines.