FQM doubles tax contribution

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By SHAMAOMA MUSONDA

FIRST Quantum Minerals (FQM), the owner of Kansanshi Mine in Solwezi, has this year paid K3.05 trillion to Government in taxes more than double the amount it paid last year.

The US$611 million tax paid out through corporate, mineral royalty and pay-as-you-earn among other taxes translates into an average of $1.67 million payment every day.

According to Lumwana Mine public relations manager Godfrey Msiska, FQM was committed to the development of Zambia by meeting all its tax obligations and the future of the mine through various expansion programmes.

“FQM is committed to the development of Zambia by meeting all its tax obligations. We are expanding our operations which should increase output. This year, we are paying $611 million in various taxes to the Government,” Mr Msiska said.

Kansanshi is one of Zambia’s largest copper producers and mines gold at its mine in Solwezi.

According to figures released by Mr Msiska, Kansanshi Mine, one of the world’s biggest single mines, last year contributed $286 million in taxes excluding the windfall tax.

Of the $611 million tax, about 85 per cent of it or $ 519 million is corporate tax, charged at the rate of 30 per cent, the same rate as in Democratic Republic of Congo, Peru and now Australia.

Out of the $611 million, the mineral royalty tax contributed $66 million, customs and import duty $8.6 million while PAYE accounted for $17.3 million which is about three per cent of the tax paid out.

Kansanshi Mine’s tax contributions to Government inception in Zambia has been on the increase every year except for 2009, due to the Global economic recession then, which also saw copper production drop.

In 2005, $8 million was paid out and the figure jumped to $62 million in 2006, $122 million in 2007 and $207 million the following year.

With the Global economic down-turn effects hitting, the tax contribution dropped to $113 million in 2009 but rose to $286 million last year and $611 this year.

Apart from that, there has been a $225 million paid in back-taxes bringing the total tax contribution since 2005 to USS$ 1.63 billion.

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First Quantum pays more than US600 million in taxes to Zambia
Tuesday 06 Dec, 2011First Quantum Minerals Limited, owners of Kansanshi Mine in copper rich Zambia doubled its taxation this year to more than USD 600 million compared to a year earlier.

According to a statement by the company, First Quantum Minerals this year remitted USD 511 million in taxes to the Zambian government more than double the amount it paid in 2010. The company remitted USD 611 million in taxes for corporate, mineral royalty and pay as you earn among others translating into an average of USD 1.67 million payments every day.

Mr Godfrey Msiska Mine Public relations manager stated that First Quantum Minerals was committed to the development of Zambia by meeting all its tax obligations and the future of the mine through various expansion programs. We are expanding our operations which should increase output. This year, we are paying USD 611 million in various taxes to the Government.

Kansanshi is one of Zambia’s largest copper producers and mines gold at its mine in Solwezi, near the border with Democratic Republic of Congo. Kansanshi Mine, one of the world’s biggest single mines last year contributed USD 286 million in taxes excluding the windfall tax. Of the USD 611 million tax about 85% of it or USD 519 million is corporate tax charged at the rate of 30 per cent, the same rate as in Democratic Republic of Congo, Peru and now Australia.

Out of the USD 611 million, the mineral royalty tax contributed USD 66 million customs and import duty USD 8.6 million while Pay As You Earn accounted to USD 17.3 million, representing three per cent of the tax paid out.

Kansanshi Mine’s tax contributions to Government inception in Zambia has been on the increase every year except for 2009, due to the Global economic recession then, which also saw copper production drop. In 2005, USD 8 million was paid out and the amount rose to USD 62 million in 2006, USD 122 million in 2007 and USD 207 million the following year.

With the Global economic down turn effects hitting, the tax contribution dropped to USD 113 million in 2009 but rose to USD 286 million last year and USD 611 this year. Apart from that, there has been USD 225 million paid in back taxes bringing the total tax contribution since 2005 to USD 1.63 billion.

Recently First Quantum Minerals’ reported that its profits had increased by more than 30% at its various operations during the last three months ending September 30th 2011 compared to a year earlier although production of gold decreased at its Zambian operations.

The company’s net profits from production and sale of its base metals that included copper were USD 195.5 million at the end of three months on September 30th 2011. This was after the company paid USD 127.1 million in income taxes from its gross earnings of USD 322.6 million.

However production of gold at its Kansanshi mine operation in north western Zambia was nine percent lower than in quarter three a year earlier chiefly on account of grades decreasing proportionately with the decreased copper grades in quarter three this year.

Kansanshi's cash cost of production increased 43% over quarter three in 2010 on account of the impact of lower grades and recoveries in quarter three this year. The company added in its report that the total processing costs were also higher as a result of increased input costs for acid, oil based consumables and costs incurred during circuit reconfiguration.

The gold credit in the third quarter this year benefited from an increased realized gold price Kansanshi's gross profit was 10% higher than quarter three last year because of higher sales volumes and realized prices in the current period, offset partially by higher production costs.

The Zambian government, through its subsidiary, Zambia Consolidated Copper Mines Investment Holdings has 20% stake in Kansanshi mine, one of the First Quantum Minerals' units it operates worldwide. The company holds 80% in the Zambian operations.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)