Zambia may only receive $171 million from imminent sale of Equinox Minerals

Zambia may probably receive USD 171 million from the imminent sale of Equinox Minerals, the 100% owner of Lumwana Mining Company in the Southern African nation.

Opposition Patriotic Front lawmaker, Mr Wylbur Simuusa who is also chairperson for mines stated that Zambia’s low stake in Lumwana Mining Company would result in the country getting a paltry amount from the country’s record transaction in the mining sector.

Equinox Minerals’ sale to Garrick has been valued an initial value of USD 7.68 billion. Barrick Gold recently agreed to buy Equinox Minerals whose Lumwana Mining Company built for over USD 1 billion in Solwezi in Zambia is Equinox Mineral’s primary asset while other operations include a copper development project in Saudi Arabia.

According to the lawmaker it was imperative for the government through the Mr Maxwell Mwale mines minister of Zambia to categorically state the future of ZCCM IH’s stake in the new company after Barrick Gold takes over Lumwana Equinox Minerals. It was his view that although Zambia was likely to benefit USD 171 million from the Equinox deal the concern was that the country’s shareholding, through ZCCM IH was likely to be diluted.

Mr Simuusa also regretted that the government position on the transaction of the Lumwana magnitude remained unclear despite the country hosting the mines. Meanwhile he that Mr Rupiah Banda president of Zambia who recently officiated at the ground breaking ceremony for First Quantum’s Trident Mines in Solwezi was celebrating deprivation of Zambians by witnessing the event wholly owned by foreigners.

Mr Banda was worsening the poverty levels in the country by creating an environment that exclusively favored growth of the foreign capital. Mr Simuusa regretted that President Banda went to celebrate the opening of the new mine with little benefits for the country.

During the official opening of the over USD 1 billion First Quantum Minerals Trident mining in North Western Province, a project to be heralded by Kalumbila Mines in Solwezi recently Mr Banda was happy that the mining sector had become viable again and contributing significantly to the economic growth of the country. He hailed the USD 1 billion Trident project as a boost to economic and social wellbeing of people in Solwezi and the country as a whole.

However Mr Simuusa contended that the Zambian leader was depriving the Zambian people of their birthright by abrogating the Zambian laws on mining. Under the Zambian laws Zambia, through ZCCM IH needed to retain 35% stake in new mining projects. He contended that the lack of windfall tax and other credible taxations to the mining industry was eying into the economy which needed to be reviewed.

He stated that in the absence of the windfall tax and the projected high copper prices, the country’s future needs to be nurtured by increasing the government’s stake in these mines with the higher copper prices on the metal market where Zambia was losing out. On the shareholding, the lawmaker contended that since the shareholding is not being handled properly, the foreigners in the end were likely to get everything while Zambians will be deprived of real returns.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)

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