By BUUMBA CHIMBULU
A STUDY by the Policy Monitoring and Research Centre (CTPD) has outlined a number of challenges that should be resolved to support Government’s aspirations of attaining three million metric tonnes of copper production in a decade.
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The study, released on Wednesday, established that the mining sector has been faced with several challenges which will require to be resolved to meet this aspiration.
Some of the identified challenges established in the report include: unstable and inconsistent mining tax regime, delayed Value Added Tax (VAT) refunds, high cost of capital, and inadequate local sources of financing mining projects.
Others are high cost of energy, lack of detailed and updated geological information as well as licensing challenges at the cadastre department.
According to the study, the mining tax regime had been unstable, uncompetitive, and unpredictable for a long time now.
“Coupled with the unstable tax regime, mining houses indicated that the current tax rates are high in comparison to other jurisdictions which makes it difficult to attract both local and foreign investment,” it stated.
It also pointed out that the high-interest rates were detrimental to business and the mining industry would not be an exception.
The study established that the high cost of capital would discourage indigenous Zambians from venturing into credible mining operations.
“Small mineral deposits can easily be exploited by local companies, but start-up capital has always been a challenge,” according to the study.
On inadequate local sources of financing mining projects, the study stated that mining operations required huge capital inflows for investments and expansion projects and such huge capital needs were not available on the local market.
The study also pointed out that lack of geological information continued to undermine the growth of the mining sector.
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