Zambia reviews mining license ban

Africa’s largest copper producer Zambia is reviewing a government suspension on issuance of new mining licenses.
The ban was imposed in October by Mines Minister Wilbur Simuusa so that the state could look into allegations of corruption in the minerals extractions sector.
Simuusa this week said the ban was being reviewed.
The ban is on issuance of new mining licenses, renewals and transfers of licenses.
Minister Simuusa said the present licensing processes were inefficient and led to irregularities, litigation and The minister reiterated that the government was looking at ways of increasing the state’s stake in foreign mining companies, in addition to revamping the tax system to improve transparency and maximize benefits for the country.
The existing tax collection process is difficult to administer and its revision would lead to greater tax compliance by miners, he said.
The Zambia government has also suspended metal export permits ahead of the release of new guidelines.
President Micheal Sata, who ascended to power on September 20 this year, has often expressed his dissatisfaction with the manner in which the mining sector has been administered in recent years.
Mining companies are accused of under-receipting and transfer pricing while not investing enough to develop the communities surrounding the areas they operate in.
The government wants all export payments be routed through the central bank for greater accountability.
However, the Chamber of Mines has resisted these moves. Chamber of Mines GM Fred Bantubonse has also said he is not aware of any bans in place or any material changes to the operating environment.
He said they had not received any official communication from the government to that effect. Mining is the biggest economic sector in Zambia but contributes only about 10 percent of its tax revenue.
According to figures from Zambian state authorities, most of the country’s copper is bound for Switzerland but little of it shows up in Swiss customs data.

December 2011
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