RELAXED FISCAL RESTRICTIONS CHEER MINES
By SANFROSSA MANYINDA
BARRICK Gold Chief Executive Officer Mark Bristow says the normalisation of Zambia’s fiscal restrictions is a significant event in the country’s efforts to attract fresh investment.
Zambian tax policies have been revised in the 2022 national budget.
This means that mining royalties are now deductible from corporation tax under new laws.
Barrick Gold operates the Lumwana copper mine which is on course to contribute roughly 20 percent of the group’s annual earnings before interest, tax, depreciation and amortisation owing to the improvement in the copper price.
Mr Bristow said the real reward the company would give to the government was that the mine was delivering.
” Lumwana estimated would deliver $400m a year, and possibly even more with the relaxation in Zambia’s fiscal regime.
” But Zambia ought to consider further relaxation of fiscal regulations miners face such as the sliding scale used to calculate royalties to en-courage investment,” Mr Bristow said.
He said Zambia had targeted an increase in copper production of about three million tons a year in ten years from the current production of about 800,000 tons.
Mr Bristow added that the improvement in the copper price also meant that Barrick would have more flexibility on whether it proceeded to the development of a super-pit at Lumwana.
He added that exploration geologists working at the mine were looking at targeting improved grades and a lower strip ratio to enable this.
The mine currently has a 30-year life at Barrick’s copper price assumption for its 2021 financial year of $2.75 per pound.
Lumwana is forecast to produce between 250 Million and 280 million attributable pounds of copper this year. Production in the group’s third quarter was 56 million pounds, a slight reduction in the second quarter.