Lumwana Mining Company Limited (LMC) has reiterated that Zambia’s operating environment in the mining industry has become immensely stained and placed the company in a challenging situation.
LMC executive director Nathan Chishimba told North-Western Province Permanent Secretary Willies Manjimela recently that of particular concern was the 2019 mining fiscal regime changes to taxes and royalties, which would imperil the mining company’s ability to sustain returns to all stakeholders, such as the significant contribution of more than US $3.3 billion it had already made to the Zambian economy over the past 10 years.
In an interview, Chishimba said because of the stained mining environment sector in Zambia, LMC was trying to work through a survival mechanism in order to remain government’s key partner in the country’s developmental agenda.
“Lumwana is going through some hard times because the operating environment for the mining industry has become stained. So, we are trying to work through a survival mechanism because Lumwana is there to mine as a partner of government for the long-term,” Chishimba said.
“We are still hoping that going forward, together as a mine and the government, we can reach an understanding that will create that conducive environment that will allow the mine to stay afloat, expand and do more for the community.”
Asked whether there had been any satisfactory consideration of the mines’ concerns over the 2019 mining fiscal regime, Chishimba said what would be ideal to avoid a lot of pushing back and forth was for government to involve the mines and other key stakeholders before arriving at some of the measures that impacted the sector.
“If you look at the world practice, when you do a fundamental review of the taxation regime and, indeed, any element of the regulatory policy, there is always a phase, which you go through, the stakeholder consultation. Sadly, in this case, that was not the case. Be that as it may, we have engaged with government and they are showing signs that they are willing to talk to us on how best we can move forward without necessarily disrupting our operations,” Chishimba added.
He added that the mining industry wanted the 2019 mining fiscal regime changes brought in by this year’s budget to be resolved faster.
Chishimba, who is also immediate past Zambia Chamber of Mines President, said LMC continued to engage government and community stakeholders about a mutually-beneficial way forward for the operation.
LMC, a copper mining company owned by Barrick Gold Corporation, is situated in North-Western Province.
In January 2019, Barrick’s chief operating officer for Africa and the Middle East, Willem Jacobs said Lumwana had made detailed proposals to the Zambian government about a partnership approach, which would provide the State with an improved share in the economics of Lumwana without overburdening the mine.
“Finding a win-win solution between the industry and government would without doubt increase investor confidence in Zambia and safeguard the long-term prospects of its mining industry,” Jacobs stated in a statement released on January 21.
At the time, Jacobs had described as untrue media reports that Barrick had sold Lumwana, emphasizing, however, that given the challenging conditions the mine faced, all options would have to be considered.