Monday, 19 June 2017

By MacPherson Mukuka

First Quantum Minerals (FQM) has put its weight behind civil society calls for communities to share in the benefits of the nation’s mineral resources, and has called on government to ensure tax revenues from the mining sector are well spent.

The mining firm, which is Zambia’s largest taxpayer, was responsible for more than a third of government income from the mining sector in 2015, accounting for US$3.3 billion of revenue to the State in the last 11 years.

The company has re-emphasised its commitment to ensuring that it operates within applicable laws and regulations – and indeed exceeds them - and consistently reports all production figures, taxes and royalties to national and regional government.

FQM operates Africa’s single largest mine by production, Kansanshi in Solwezi, as well as the more recent Sentinel mine at Kalumbila. Each mine also has an associated community development organisation: the Kansanshi and Trident foundations respectively, dedicated to ensuring sustainability.

FQM country manager General Kingsley Chinkuli says it is for this reason that the company has spent over US$43 million on its sustainability and community development programmes by aligning the Kansanshi and Trident foundation programmes to the United Nations Sustainable Development Goals.

He said true economic growth of a country is reflected in the state of health, education, agriculture and quality of life that its citizens live.

Gen. Chinkuli was speaking ahead of this year’s 6th Zambia Alternative Mining Indaba (ZAMI) to be held under the theme “Mineral development for all, leaving no one behind”, which will take place from June 20-22, 2017 in Lusaka in parallel to the Zambian International Mining and Energy Conference (ZIMEC), a government-sponsored event that attracts the interest and attendance of key industry decision-makers from both public and private sectors.

The main goal of the ZAMI is to create a platform for communities, government, civil society organisations, and companies to discuss the real-life experiences of the costs and benefits of extractive industries and how best they can contribute to sustainable development in the country.

Gen. Chinkuli said despite falling copper prices coupled with a challenging electricity supply, the mining sector has continued to be the country’s major productive industry, with a high contribution to exports and government revenue.

He added that FQM will join the platform provided by ZAMI to highlight the measures his company has put in place to drive growth while fostering conservation farming, healthcare, and business linkages in the areas neighbouring our operations.

According to analysis by the Extractive Industries Transparency Initiative (EITI) ten companies contributed approximately 88 percent of total government revenues from the extractive industries sector in 2015, with FQM’s Kansanshi Mining accounting for almost 24 percent of the total extractive revenues for the year from mineral royalties, income tax, pay-as-you earn (PAYE), VAT, customs duties and other taxes and fees.

First Quantum has called on government to ensure that it also plays its part in ensuring that tax revenue is well spent for the benefit of local communities.

The extractive industry contributed 78 percent of the country’s exports in 2014, but that fell dramatically to 47 percent in 2015 due to lower copper prices on the world market. As a result, the sector’s contribution to government revenue fell from 32 percent to 18 percent.

First Quantum has invested in excess of US$5.7 billion in its Sentinel and Kansanshi Mines and the Kansanshi Smelter, and has paid more than US$3.3 billion in taxes in the last 11 years, transforming the economy of North-Western Province and creating employment for more than 8,500 people.

The 2017 ZAMI will gather leading civil society members, government officials and industry experts and players from within Zambia and beyond to learn and share developments in the extractive sector and how mining activities can contribute to Zambia’s socio-economic development trajectory.

The Indaba will also provide for a forum to discuss practical solutions to challenges being faced by mining host communities.

The specific objectives of the ZAMI will be to provide a platform for CSO members to exchange experiences on the sector-specific issues with a focus on potential areas, gaps and challenges in areas of; human development and mining development, taxation, growth and investment, land, environment, compensation, policy and legislation, international and regional mine development agendas.

The event will also generate recommendations for the government and extractive industries for enhanced management of extractive sectors for sustainable development.

Source: Langmead and Baker

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