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AMN - Zambia must consult on mining changes – comment by Yolanda Torrisi

Yol headshot May 2011

Zambia is mulling changes to mining regulations and taxes which it says will ensure a better deal for the country and its residents but during this process consultation with the mining industry is a must. Too often in Africa, and around the world, the regulations are changed without consulting all players to the detriment of one sector or another.

The country’s Mines Minister told delegates at Mining Indaba in South Africa that dialogue, cooperation and consultation between government and the mining industry are critical in helping to alleviate the trust deficit between the two and to grow Zambia’s production.

This is good to hear if Zambia is to benefit fully from its wealth of mineral resources. To do so stable mining policy is needed and this can only be achieved by full, open dialogue with all stakeholders.

Mining remains a significant sector of the southern African country’s economy and generates the largest amount of revenue for the government through taxes. The industry is the largest employer in Zambia after the government.

Although the government is seeking to diversify its economic base, mining must continue to play a major role and further foreign investment is needed to realise the industry’s full potential.

The Minister stated that it is no good surprising the mining industry with changes to mining policies that impact on their operations, particularly in the long term.

He predicted that reforms would be introduced in the first half of the year but they would be subject to full consultation and the mining industry would be given multiple opportunities to comment and provide input.

The Minister conceded that the government could do better on the general issue of public perception of the role and contribution of the mining industry in economic development now and in the future, saying this could be better explained.

A new change already implemented by Africa’s second biggest copper producer has come in the form of a law requiring miners to transport 30% of their cargo by train. While this has been done to boost the country’s rail sector, miners have expressed concerns about the rail capacity, warning that the government has not properly considered the potential impact on the network.

Zambia’s rail network has a mere 5% market share and rail infrastructure is particularly poor in the Copperbelt in the country’s north.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com