By Austin Kaluba –
SINCE copper mining was commercialised in the 20’s, Zambia has been dependent on the mineral, which has been responsible for major political and economic policies in this region.
These include the Federation of Rhodesia and Nyasaland, nationalisation and partially the removal of the UNIP government from power.
Modern Zambian history is entwined with copper mining from the time Zambia embarked on the Mulungushi Reforms of April 1968, in which the Government declared its goal to acquire an equity holding (usually 51 per cent or more) in a number of key foreign-owned firms, to be controlled by the Industrial Development Corporation (INDECO).
By January 1970 a majority holding had been acquired in the Zambian operations of the two major foreign mining corporations, the Anglo-American Corporation and the Rhodesia Selection Trust (RST),                             which became the Nchanga Consolidated Copper Mines (NCCM) and Roan Consolidated Mines (RCM), respectively.
In radical economic reforms, the Government formed a new parastatal body, the Mining Development Corporation (MINDECO), with Government control later extended to insurance companies and building societies.
These were placed within a new parastatal body, the Finance and Development Corporation (FINDECO) which was later married to INDECO, MINDECO in 1971 under a parastatal, the Zambia Industrial and Mining Corporation (ZIMCO), to create one of the largest companies in sub-Saharan Africa.
In 1973 management contracts under which the day-to-day operations of the mines had been carried out by Anglo-American and RST were ended.
In 1982 NCCM and RCM were merged into the giant Zambia Consolidated Copper Mines Limited.
The dependence of Zambia on copper was put to test when the price of copper, which in 1973 accounted for the vast majority of all export earnings, halved in value on the world market in 1975.
This led to Zambia being massively indebted to the International Monetary Fund (IMF) with a roller coaster of events that eventually resulted in the removal of Kenneth Kaunda’s government.
However, efforts to privatise the mines, the mainstay of the economy, were problematic given the size of the conglomerate and the potential for loss of control to powerful foreign investors.
It is in this view that the Cabinet’s approval of the mineral royalty tax regime should be hailed as a giant leap in getting a fair deal from copper mining.
President Edgar Lungu has since directed ministers of Mines and Finance to present the approved changes at next Monday’s Cabinet meeting while the Government continues consultations with stakeholders.
The 2015 national Budget saw a change to the country’s mining tax regime which had an increase in mineral royalty taxes from six per cent to eight per cent for underground mines, and to 20 per cent from  six per cent  for open pit mines.
This move vexed mining firms, with some threatening to halt operations because of the envisaged increased operational costs.
Recently, BHP Billiton Ltd’s mines in Chile — Escondida, Spence and Cerro Colorado — opted for the new tax structure which increased the average income tax.
As things stand, there is light at the end of the tunnel that the Government and mine owners will reach an agreement that would benefit both parties.