By Hicks Sikazwe –

THE new mineral tax effective last month has been, for years, the missing catalyst in the pursuit for equity in the distribution of Zambia’s mineral wealth particularly copper proceeds.
The decision itself was bold, that as a long term measure what would be appropriate is for Government to move another step further and find ways that would ensure optimum levels of local benefit.
Remember, how much Zambia is now gaining from auctioning of the country’s emeralds here at home as opposed to doing that outside? How else can one then agree with President Edgar Lungu’s recent remark that: “We must also maintain the country’s right to collect due taxes”?
Of course, as expected mine firms are unhappy, arguing the new tax would scale down production and discharge unprecedented job losses.
Leading the protest was Barrick Gold Corporation, a Canadian multinational, which on December 18, 2014 announced suspension of operations at Lumwana near, warning closure would cost 4,000 jobs.
This followed Parliamentary approval of a proposal in the 2015 budget to increase mineral tax for open pit mining from six to 20 per cent and six to eight per cent for underground mining. Government has since engaged the mining firms over the matter with President Lungu ordering quick negotiations to ensure a win – win situation, to protect jobs and mine companies making profit.
But can   Barrick really pull out just like that?   Any one who has visited Lumwana mine and witnessed the massive investment there, may find it difficult to go along with the threat to cease operations without the firm suffering irreparable consequences. That level of investment simply confirms one thing: that Barrick is minting attractive revenues.
How much money is the company making for the operations, what is the amount being spent on workers, how much will be generated under the new mineral tax. Immediate answers to these questions would be helpful.
Added to that there is internal focus by reputable researchers of an African mining boom (Including Zambia) in 2015. Trimetric, a UK based consultancy firm after carrying out research in 100 African countries plus Zambia, forecasts expansion in the continent’s mining Industry this year. Why then would Barrick leave Lumwana?

. Dr Pule

Two former deputy ministers (under MMD) Daniel Pule, and Dr Mathias Mpande think that the company is using the threat to go as a bargaining chip.
“They will never go. They are making a lot of money from the Lumwana operations,  Pule said in a January television interview.  He said while at the National Commission for Development Planning (NCDP), he dealt with donors, thus understood their tactics. He urged Government to be firm over the tax.
Dr Mpande (formerly at the ministry of mines) dared Barrick to actually pull out of Lumwana, warning in a radio interview the firm would just leave room for another investor, even Chinese to step in.
If, like this author, you grew up as a miner’s child, dependant, or even an employee, it is easy to understand the negative impact the loss of social responsibility on today’s mine communities, since the haphazard privatisation of the mining industry.
To appreciate the debate on mineral tax and how emotional and critical the issue is, one needs to understand the pre-independent Africa economic agenda.
In the colonial days key infrastructure such as railways and roads were constructed in such way that it would be easy to haul copper from the Copperbelt, transported to South African ports for onward shipment to European foundries, creating employment and improving lives of people there.
Under the Central African Federation, 1953 – 1963, one can also argue, Zambia’s immeasurable copper proceeds were pumped into developing Zimbabwe than here. Today, it would not be an understatement to observe that, Lusaka’s infrastructural development levels are unmatched to that of Harare.
As copper proceeds were pillaged Zambian mine workers toiled, with inhuman working conditions, poor salaries, and lived  in squalid accommodation, while  top and better jobs remained a preserve of whites as local people could not be allowed to train even as artisans.
The birth of Zambia consolidated copper Mines (ZCCM), a few years after independence brought change in the mining industry.
Zambianisation accelerated the rate of local people infusing and taking over white held jobs.
Mine residents enjoyed unparallel social responsibility benefits from subsidised housing to free water and electricity supply. Added to that the mines built schools, clinics, hospitals within reach of the miners and their families.  They maintained roads, and collected garbage. Do not talk of support for sport and other social amenities.
But all that withered, with the 1991 change of government and subsequent sale of ZCCM. The new owners abandoned all meaningful social responsibility programmes that today the former mine townships are a sorry sight.
Pensionable jobs no longer exist. They have been replaced by fragile fixed contract arrangements  which in fact can be terminated any time.
Government  copper revenues have declined affecting  the provision of social services  and in the end biting the very ordinary man and woman at the bottom of the ladder.
That is the core issue on why Zambians need to collect due taxes  for equity in the distribution of the country’s mineral wealth. Very clearly at the moment up to 90 per cent of copper proceeds are funneled to investor countries as the miners’ union recently acknowledged .
Last December, National Union of Mines and allied Workers (NUMW) President James Chansa commenting on the issue agreed that much as the mine owners were not happy with the tax review huge copper proceeds ended up in investor countries.
Without doubt, there has been an imbalance in the distribution of Zambia’s mineral wealth that it is  imperative for maximum benefit, to renegotiate the old contracts as a long term measure.
*Hicks Sikazwe is a former Times of Zambia Deputy Editor-In-Chief. Currently a freelance journalist focusing reporting work on mining and issues involving Media and Democracy. Comments hpsikazwe@yahoo.co.uk,
0955929611.