Open Govt dialogue key to investment – FQM

Sat, 01 Jul 2017 12:14:47 +0000

By BUUMBA CHIMBULU

BUILDING confidence between Government and the mining sector remains a vital tool to ensure that Zambia continues to attract and retain investors, says First Quantum Minerals (FQM) country manager, Kingsley Chinkuli.

General Chinkuli emphasised the need for continuing ‘‘open and honest’’ dialogue at the highest levels of Government on tax stability, power tariffs and the refund of Value Added Tax (VAT).

“Fundamental to long-term private sector investment is knowing what the costs will be for the life of the investment.

“And a natural equilibrium must be sought that sees Zambians get their fair share to realise benefit from their own country’s natural endowment whilst making investments a true business proposition, as that is what it must be,” he said.

He was speaking at the Zambia International Mining and Energy Conference (ZIMEC) last week held under the theme “Mining and energy development in Zambia – increasing economic activities”.

According to Gen Chinkuli, there was need for stability, predictability and competiveness in Zambia.

Gen Chinkuli observed the need for a reliable supply of power to FQM’s Kansanshi mine at Solwezi and Sentinel mine at Kalumbila, as well as affordable electricity tariffs.

He said FQM had over the years paid over US$1 billion in tariffs to Zesco.

He said the mining sector paid 80 percent of Zesco’s tariffs, while consuming only 55 percent of its electricity.

“The so-called cost-reflective tariffs must be precisely that, but critically they must reflect an efficient and fit-for-purpose power utility.  A truly cost reflective tariff may only be realised with the reform of ZESCO,” he said.

First Quantum has invested in excess of US$5.7 billion in its Sentinel and Kansanshi mines and the Kansanshi smelter, and has paid more than US$3.5 billion in taxes in the last 11 years, transforming the economy of North-Western Province and creating employment for more than 8,500 people