Lumwana mine threatens to close operarions

BARRICK Lumwana Mine has threatened to suspend its operations if the proposed increase in mineral royalty taxes is approved by Parliament and effected in January next year.

In a statement issued in Solwezi yesterday, the mine states that the proposed change in royalties will seriously impact its financial viability.

“If enacted, the most likely outcome would be a suspension of operations at the mine, regrettably leaving thousands of local people without employment,” the statement reads in part.

It further states that Barrick Lumwana has worked hard over the past two years to turn around the economic outlook of the mine and suspending operations is the last option it would think of doing.

“We do not believe the Zambian government wants to see mining operations suspended either. We are committed to working with the government to find solutions that will allow us to keep our jobs, keep supporting our communities and keep paying appropriate taxes,” it reads.

The statement further says that last year Lumwana Mine, working with its stakeholders, made the mine viable and produced 260 million pounds of copper but it has not yet reached a point of making profits.

The mine however says it is committed to hosting Government partnerships in order to sustain a safe environmentally and fiscal responsible mining that will provide benefits to the communities in which it operates.

“If the parliamentary budget is approved as proposed, this would be cause for great concern for Barrick and should be for concern for all our stakeholders in the North-Western Province,” it says.

The mine also states that under the proposed royalty regime, it will be required to pay more than triple from US$45 million to be paid this year to US$150 million next year.

“Lumwana will be responsible for 37 percent of the new tax revenue that the government expects to raise from the new royalty regime as it will be taxed on gross revenue regardless of the mine’s profitability but produces only about 11 percent of Zambia’s annual copper output,” it says.

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