Copper mining companies in Zambia have withheld roughly $2bn in investments because royalties, which they claim are making projects unfeasible, have risen.
Zambia is the second-largest copper-producing nation in Africa, and its government has implemented a revenue-based royalty system that has hiked copper sales taxes from 5.5pc to 7.5pc on anything above $6,000/mt. According to media reports, prices have been north of this mark since the end of June.
Moreover, if price rises to $10,000/mt or higher, the royalty will increase to 10pc.
First Quantum Minerals and Lubambe Copper have stalled their respective $1bn investments in protest of the tax hike since miners also pay income tax, and they regard the copper levy double taxation. According to reports, the Zambia’s Finance Minister Bwalya Ng’andu believes taxes on the country’s mineral resources aren’t high enough, but he conceded to considering the mining companies’ grievances.