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Mopani Copper asked government to plough tax profit in Zambi
Thursday, 07 Apr 2011
Mopani Copper Mines Limited, a JV between First Australia’s First Quantum Minerals and Switzerland based Glencore AG and operating in Zambia asked government to plough tax profits generated from mining companies into communities where mining occurs.
In what is a call for social responsibility, one of the country’s largest copper miners believes that it was imperative for government to reinvest the profits back into the community as a sustainability measure.
Mr Emmanual Mutati CEO of Mopani Copper Mines said that it was imperative for government to share the burden with mining companies to improve the livelihood of people.
Mr Kanni Wignaraja United Nations resident coordinator in Zambia visited the mines located on the copperbelt region. Mr Mutati noted that although his company has not declared any dividends to government yet, it was still a loyal tax payer.
Mr Mutati a renowned miner who served under the former state owned and controlled Zambia Consolidated Copper Mines said that its loyalty to fulfilling tax obligations could be attested by the Zambia Revenue Authority that the company was up to date with tax remittance.
Earlier this year, a row erupted over an audit report for the Mopani Copper Mine that implicated the company in some tax evasion citing some inconsistence and irregularities in the copper production figures that Mopani submitted to the revenue agency for tax administration.
Mr Mutati despite the reports, which the company clarified, stated that the miner has not declared a dividend because it has had to reinvest profits to improve production of the metal in various units it operates in Zambia. He stated that the ploughed investment is planned to extend the lifespan of the company by another 25 years which is more tangible than declaring dividends.
He argued that the practice to recapitalize operations was intended to ensure more job creation for the local people during the stipulated time, hence the need for the government to reciprocate by ploughing back the tax profits into communities to better the people’s lives many who are living in squalor despite hosting key mining companies.
Mr Mutati said that we would like to see government ploughing back some of the tax benefits into the communities within which the mines operate. The people must see tangible results for the nation’s minerals because they belong to them. Mopani had to double its labour to 20,000 which has directly benefitted the local people. The company was faced with under capitalization and the nature of the ore bodies which made it difficult to mechanize leading to lower productivity compared to mines in other countries that include Sweden and others in South America.
He added that it was difficult for mines to diversify into manufacturing industry as the country had no facilities for improving mining products with the exception of Zambia Meta Fabricators, the sole buyer of copper. It was the wish of Mopani Copper mines to see multi-facility economic zones getting into manufacturing and supplying the mines products such as bolts and nuts which mines are forced to import. It was the wish of most mining companies to spends money locally to acquire such material needed in mining activities.
The mining sector is presently faced with a serious shortage of skilled manpower, Mr Mutati, a qualified engineer himself added citing the scarcity of surveyors, ventilation officers for lack of facilities to train them for diploma and certificate courses. Mopani Copper Mines Plc is a joint venture company in which Glencore International AG has the majority stake of 73%. Mopani Copper Mine is an integrated copper and cobalt producer located in the Copperbelt of Zambia.
Mopani's operations consist of four underground mines, a concentrator and a cobalt plant in the town of Kitwe and an underground mine, concentrator, smelter and refinery in the town of Mufulira. Mufulira Copper Mine is one of Zambia’s oldest mining projects having existed for more than 79 years.
According to data, the capacity of the Mufulira Copper Smelter was being expanded in a phased approach to 870,000 tonnes of concentrate by the end of 2010. The current capacity with the new Isa smelt furnace is 650,000 tons of concentrate. Peak production of copper occurred in 1969, when 720 000 tonnes of copper was produced, making Zambia the world's 4th largest copper producer. Zambia was the eighth largest producer of copper in 2009 when it produced 655 000 tonnes of copper.
ZCCM Investments Holdings is an investments holdings company. ZCCM-IH is a successor company to Zambia Consolidated Copper Mines Limited. Prior to privatization in 2000, ZCCM Limited was a consolidated copper mining conglomerate majority owned by the Zambian government. ZCCM retains a small stake in most copper mining operations in Zambia.