The Zambia International Mining and Energy Conference (ZIMEC) saw the largest coper mining company announcing that it was withdrawing one billion US dollars’ worth of investments.
“First Quantum Minerals (FQM) announced it was withholding approximately one billion dollars’ worth of investment due to the uncertainty created by a tax dispute with the government,” Trevor Simumba, executive director at the International Business Consultant told CNBC Africa.
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FQM, Zambia’s largest Copper producer and biggest tax payer had initially planned to invest 2.5 billion US dollars.
Simumba also noted that Africa was lagging far behind in terms of policy direction and transparency in the mining sector.
“There is a notion in Africa suggesting that somehow we are not benefitting as much as we should from the mining sector and mineral resources,” said Simumba.
“We tend to look at it narrowly because on the other side we have to remember that these mining companies take a lot of risk to invest in getting these mineral resources out of the ground.”
Simumba added that, there was need for a transparent and open dialogue between government, mining sector, labour unions and civil society so that we begin to address these issues.
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“It’s not good that with some African countries turning 50 years, we are still having a dialogue on mining policy investment and particularly on the direction going forward in mining,” Simumba said.
Commenting on policy inconsistency, Simumba said it was worrying that African countries were still battling making decision on whether or not to allow private mining in some regional economies.
“It’s unfortunate as policy making is normally done in a vacuum as there is no transparency and no openness. Government is often negotiating deals directly with mining companies without disclosing the full extent of those deals which raises suspicions.”
Simumba also urged mining companies to become much more transparent.