ONCE touted as the “hen that laid the golden egg,” the mining industry is viewed with disdain after being ensnared in a lot of unethical business conduct.
This was during an era when the mining industry was the country’s unquestioned leading foreign exchange earner, providing employment to thousands of Zambians.
But this is no longer the case. What has been reported about the mining companies in recent years, makes sad reading, leaving Zambians exasperated.
The mining companies now have been associated with all manner of shady business dealings – from cheating on the value of the minerals exported, insider trading to outright dodging tax.
There must be a stop to this widespread cheating among mining companies and simply stated, enough is enough.
Green Party president Peter Sinkamba says Government should urgently come up with a mechanism that will seal loopholes and stop mining companies from evading paying taxes and mineral royalties.
Mr Sinkamba said “cooking” of figures by mining companies has resulted in the country losing huge sums of money in unpaid taxes and other statutory declarations.
Mr Sinkamba was not speaking from without. He was reacting to the recent revelations about the “economic crimes” committed by the mining companies.
A damning study has revealed that as Zambia struggles with debt, billions of dollars are being siphoned out of the country by large mining companies in unreported profit remittances.
The study, by the Developing Economics titled Haemorrhaging Zambia: ‘Prequel to the Current Debt Crisis’ states that massive outflows of private wealth over the past 15 years, reached peaks of almost 20 percent of GDP in 2012, and over seven percent as recently as 2017.
It states that the outflows were mostly related to the large mining companies that dominate the country’s international trade.
“Through this analysis, we have identified massive outflows of private wealth over the past fifteen years, reaching peaks of almost 20 percent of GDP in 2012, 15 percent of GDP in 2015, and over seven percent of GDP as recently as 2017, said the report.
This unfortunately, is not the first time that misdeeds by the mining companies are coming out.
It is an established fact, proved in the country’s highest court – Supreme Court – that some mining firms have been playing double standards in their dealings with the Zambia Revenue Authority.
Their treachery came out in the open when the Supreme Court charged Mopani Copper Mines US$13 million after it established that the firm colluded with its parent company Glencore International AG (GIAG) to undervalue the price of copper.
Since 2008, the mining companies have either been refusing or have failed to provide required documentation for them to claim VAT on their exports of minerals.
Zambians will remember that because of cheating by mining companies Government showed its determination to the scourge by imposing tougher testing measures to stem the submission of low-grade samples to under value mineral exports and consequently, loss of revenue earned by the government through mineral royalty tax payment?
Government decided that from July 1, officers from the Ministry of Mines and Mineral Development will be going to the mine sites and traders’ warehouses to collect the required samples instead of relying on samples submitted by exporters.
Mines and Minerals Development Permanent Secretary Barnaby Mulenga in June disclosed how the country was losing millions of Kwacha in revenue through cheating by mining companies that submit low grade assay, instead of the high quality minerals they export.
Quite clearly, Government has a mammoth task to ensure there is transparency in the operations of mining companies hence the continued calls by stakeholders to its functionaries to be on top of things and save the country from being milked dry.
TAMING THE MINES
