Government guarantees a concern for Zambian mining companies - CNBC Africa

Government guarantees a concern for Zambian mining companies

Southern Africa

by Trust Matsilele 0

AZMEC says, government guarantees, are a concern to mining companies. PHOTO: Ethicalliving

Geoffrey Mulenga, the Association of Zambian Mineral Exploration Companies (AZMEC) president, told CNBC Africa that government guarantees and concerns raised in the sector needed to be addressed as to assure investors.

(READ MORE: Zambian mining requires new investment)

“This [government guarantees] is a matter of continuous discussion as some mining companies are not happy with what is likely to happen with their investments,” Mulenga noted.

Mulenga added that the topical subject in the mining sector now involved the 2008 mineral act adding that there were certain tax matters affecting AZMEC members.

“The 2008 act has few anomalies that discourage exploration such as the tenure of licence and security of the tenure,” he added.

“The government has engaged us to look at the repeal of the 2008 act and we are getting full cooperation.”

AZMEC president explained that there were other tax related matters that required resolution.

“We have VAT exemption which is operational for five years. This does not correspond with the tenure of licences which is seven years. However, this has been amended to ensure that the tenure correspond with the full length of the prospecting licence,” says Mulenga.

“As part of our dialogue with the government, we are looking at tax matters that might affect us in the future when our members go into production.”

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Mulenga added that there were bottlenecks coming up every day saying chamber of mines was continuously talking to government in bid to resolve these challenges.

He also said the mining explorers were also investing in social responsibility projects.

(READ MORE: Mining companies looking to new avenues to combat Africa's infrastructure deficit)

“At this stage all we are doing is spending money doing explorations. Our members are also looking at community schools and clinics in their areas even when they are not in production.”

However, Mulenga said some production companies were complaining over minimum wage requirements which was driving down company margins. 

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