Economics Association of PF President Lubinda Haabazoka has advised government to take over the mines.
According to Habazoka, the Zambian government is spending $700m in VAT refunds to the mines annually and $240m in electricity subsidies to the mines including $60m in fuel subsidies to the mines annually.
“Total $1billion. Yes $1bn that if we withheld, we could repay all our Eurobonds without refinancing. Now can you ask the mines how much platinum and other rare minerals they mined last year? Where are the proceeds? Ndola refinery under ZCCM was responsible for extracting such,” Haabazoka said.
“The mines last year produced over 800 thousand tonnes of copper. The average price of copper last year was $6000. In total, they received not less than $4.8bn. Now these are official figures. Now how strong was our currency going to be if we kept even $2bn of that here?”
He further claimed that, “Chile, the largest copper producer learnt management of its mining companies from Zambia. Their company Codelco whose CEO I met sometime back was formed under ZCCM model. Foreign investors in Chile were given greenfields and government there cannot be cheated because they also own mines. Chile today has a copper stabilization fund that the country uses during downward economic slumps. Chile today is developing very fast and after copying from us do not know any inflation problems.”
Haabazoka said Zambia needs to act now.
“We need to act as a country. For those saying we can move in to control the negative trends in the mines, what is your alternative proposal?” he asked.
Haabazoka is currently seeking to be appointed as Bank of Zambia governor so that he can bring some Russian ideas to the economy.