By JAMES KUNDA? –
THE Chamber of Mines of Zambia (CMZ) has proposed that Government?revokes Statutory Instrument (SI) number 89 of 2010 that provides for?tax to be charged on exports of mineral concentrates.
In the mining sector budget proposals for the 2015 National Budget and?2015-2017 Medium Term Expenditure Framework (MTEF) presented to the?Ministry of Finance, CMZ says the duty exempt policy on concentrates?should be re-introduced.
It states that the mines currently hold large stocks of concentrates?which for some technical reasons cannot be processed in Zambia.
‘‘These include high insol materials that may not be able to be smelted?locally; government needs to understand that the industry only exports?the concentrates it cannot technically and/or economically treat.
‘‘This therefore is not entirely due to local smelter capacity, but?also has to do with technology, and the industry is capable of?demonstrating what kinds of concentrate can be treated locally and?this would also help tackle the perception that companies were?smuggling other metals within the concentrates,’’ says CMZ.
The chamber says other minerals mined in small quantities like Nickel?have no further processing capacities beyond concentrate stage in?Zambia.
Furthermore, the available quantities being mined in Zambia are?limited and, therefore, not feasible to build nickel smelters in the?country.
‘‘This would affect any mining house that would wish to develop a?nickel, or similar mine. If the proposal cannot be accepted in whole,?a partial waiver can be advocated for nickel concentrates,’’ states?CMZ.
Meanwhile, CMZ further submitted that Government should reintroduce?permanent Value Added Tax (VAT) deferment on cobalt concentrate?imported.
The chamber says due to shortage of higher grade cobalt concentrate in?Zambia, Zambian processing and tolling plants have to import most raw?materials from the Democratic Republic of Congo (DRC) to maintain?cobalt production.
CMZ says currently Zambia produces approximately seven to eight per?cent of the world’s cobalt metal and over 90 per cent of this is produced from imported cobalt concentrate.
‘‘Until 2011 cobalt concentrate were kept under permanent Import VAT?deferment to avail smooth import of cobalt concentrate for Zambian?processing plants to process cobalt locally in an efficient and?competitive manner.
‘‘We would propose the reintroduction of VAT deferment permanently on?cobalt concentrates to enable Zambian processing companies maintain?cobalt production efficiently and consistently, thereby ensuring value?addition within Zambia,’’ says CMZ.
Other submissions are on the controversial Value Added Tax (VAT) Rule?18, capital allowances, premiums and discounts.