Zambia says First Quantum to pay $224 mln in back tax

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Conforme à ce qui avait été annoncé lors des derniers résultats de FQM



Wed Jun 29, 2011 10:06am GMT



LUSAKA, June 29 (Reuters) - First Quantum Minerals (FM.TO: Quote) has agreed to pay Zambia $224 million in tax arrears by Friday, Finance Minister Situmbeko Musokotwane said on Wednesday.

The payment was for tax arrears the company incurred after mining companies disputed the government's decision in 2008 to raise taxes against long-term development agreements, whose scrapping they finally accepted last year, he said.

"We are expecting $224 million from First Quantum Minerals and I think we should be getting it today or tomorrow," he told journalists.

The company has also been singled out along with Konkola Copper Mines (KCM), owned by London-listed Vedanta Resources (VED.L: Quote) and Glencore's (GLEN.L: Quote) local unit Mopani, for tax issues related to audits.

The companies are keen to have such outstanding issues resolved. The European Investment Bank for example has frozen new loans to commodities trader Glencore over governance issues including its Zambian operations. [ID:nLDE75014B]

According to the World Bank, copper is responsible for 70 to 75 percent of export earnings but the mining industry as a whole only contributes about 10 percent of Zambia's tax revenue.

The government has made tax compliance from the miners a top priority as Africa's biggest copper producer is also one of the world's poorest countries. (Reporting by Chris Mfula, editing by Ed Stoddard)

[Clint]

First Quantum Minerals pays more than USD 1 billion in taxes to Zambian government
Tuesday, 12 Jul 2011First Quantum Minerals Limited, one of the global leading mining companies paid to date more than USD 1 billion to the Zambian government in various taxes as part of their obligations.

Since the start of the global financial crisis in 2008, the Toronto and Sydney listed First Quantum Minerals has paid over USD 1 billion to the Zambian government’s Revenue Authority. The taxes range from mineral royalties, payroll taxes, pension benefits for its employees, health insurance premiums and work premiums over the period.

First Quantum stated that the payments recently made in excess of USD 224 million to the government brings the total amount paid in corporate tax in 2011 from Kansanshi mine, 20% owned by the government through ZCCM HZ to USD 425 million. This is in addition to a total of USD 922.5 million paid since it began operations in Zambia in 2006. Added to the mining royalties which First Quantum paid USD 180.1 million it paid Pay As You Earn for employees of USD 136.3 million while dividends to the Zambian government amounted to USD 34 million.

The remittance to various aspects of its operations including payments to its workers separating with the company has hit USD 1.273 billion to date making it the most compliant mine in the country over taxes and other obligations.

The statement said that the result is that today, First Quantum Minerals’ Kansanshi Mine project is effectively contributing USD 1.5 million per day to Zambia. The resources belong to Zambia. But it takes a strong and committed Canadian mining partner to help unlock the benefits. This is why the Canadian EU Mining Council is pleased to highlight the contributions First Quantum Minerals is making to Zambia’s economic and development growth program.

First Quantum Minerals added that, like other members of the CEUMC, actively support the principles of the Extractive Industries Transparency Initiative, encouraging full financial transparency by companies and countries in accordance with prevailing mining laws and development agreements. This will enable communities, countries, companies and international development partners to know how much are being received, from the nation’s resources.

Additionally the company stated that the CEUMC and First Quantum Minerals strongly endorse Zambia’s efforts to become an EITI implementing country to ensure all are tax compliant. First Quantum recently announced in excess of USD 2 billion of additional planned investment in Zambia.

The company plans 60% expansion to its existing Kansanshi mine, development of a major new copper mine at its Trident project and downstream investment in a substantial new copper smelter. Additionally, as a recognition gesture by the company over the value of the mining industry in Zambia and world over, First Quantum Minerals seeks to list 40 million depository receipts on the Lusaka bourse by July 2011.

The new investments will undoubtedly benefit Zambians and enhance their growth and development. The privatization of the mines has undoubtedly helped Zambia develop the economy with foreign mining investors among other stakeholders through ZCCM IH.

Data showed that ZCCM IH owns 35% equity in Maamba cola mine, 20.5% in Konkola Copper Mines, Kansanshi Copper Mines Plc 20.0%, Copperbelt Energy Corporation Plc 20.0% and Konnoco Zambia it has 20.0%. Other companies are Copper Luanshya Mine Plc with ZCCM, IH owning 20.0%, Non Ferrous Chine Africa Mining Plc, 15.0%, Chibuluma Mines Plc 15.0%, Chambishi Metals Plc 10.0%, Mopani Copper Mines Plc 10.0%, Equinox Minerals Limited it had 2.3% through Lumwana Copper Mines while in Albidon nickel miner, the sole producer it has 1.0% as at end of February 2011.

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