Zambia: Mineral royalty here to stay

Zambia would maintain a new mineral royalty tax despite fears that it could lead to mine closures, President Edgar Lungu said yesterday as he was inaugurated in Lusaka. Africa’s second biggest copper producer hiked open pit mining royalties to 20 percent from 6 percent and underground royalties to 8 percent from 6 percent in its 2015 budget, a move mining companies have said could cost 12 000 jobs. Mining, the spluttering motor of one of Africa’s fastest-growing economies, accounts for 12 percent of gross domestic product and 10 percent of formal employment in the country. Speaking after being sworn in at a colourful ceremony at the National Heroes Stadium, Lungu said his government’s policies would remain consistent and predictable. The introduction of a mineral royalty in place of a corporate profit-based tax as the final tax was meant to ensure that mines pay the right taxes, he said. Ruling party candidate Lungu secured a narrow victory in this week’s presidential election, defeating his closest rival Hakainde Hichilema. – Reuters