By JAMES KUNDA? –

LUMWANA Mine in Solwezi has recorded a slump in copper production by more than 2,000 tonnes in the third quarter of 2014, as owners raise concerns that the mine could lose its viability ahead of implementation of the new mining tax regime in January next year.
According to the third quarter results published by Barrick Gold Corporation, Lumwana produced 25,724 tonnes of copper in the third quarter of 2014 compared to 27,818 tonnes of the metal produced during the same period last year.
Barrick Gold co-presidents Kelvin Dushnisky and Jim Gowans said in a statement that this highlighted a difference of 2,094 tonnes in copper production over the two comparable periods.
Mr Dushnisky said the decrease in copper production which was at Lumwana was primarily due to the partial conveyor collapse which shut down concentrate production for most of second quarter 2014.
“Lumwana contributed 25,724 tonnes at cash costs of $1.84 per pound, subsequent to quarter end, the Zambian Government proposed changes to the country’s mining tax regime that would replace the current corporate income tax and variable profit tax with a 20 per cent?royalty,” he said.
If approved, the new tax regime would take effect on January 1, 2015 and the application of a 20 per cent royalty rate compared to the six per cent royalty the company was currently paying would challenge the economic viability of the mine.
He said if the tax change was ratified by Parliament and implemented as proposed, the royalty could create an unsustainable level of taxation for Lumwana that could result in impairment to the carrying value of the Lumwana asset at current market prices for copper.
Mr Dushnisky said this may also result in a substantial portion of Lumwana’s reserves being reclassified as resources.