Kansanshi Mines withholds $1.5bn investment in Zambia over tax refund issue
Kansanshi Mines has revealed that it will not invest $1.5bn in the ongoing expansion of its facility in Solwezi until the Zambian Government provides a tax refund.
Kansanshi Mines was quoted by Zambia Reports as saying that, as the company is yet to receive $230bn in tax refunds, it will not be able to investment in new projects until the money is refunded.
As per new tax laws, the threshold of mining royalties has increased from 4% to 20%.
Kansanshi mine is claimed to be one the largest copper mines in Africa and is 80%-owned by Kansanshi Mining, a First Quantum Minerals subsidiary. The remaining 20% is held by a subsidiary of ZCCM.
The mine is located approximately 10km north of the town of Solwezi and 180km north-west of the Copperbelt town of Chingola.
First Quantum Minerals COO Mathew Pascal was quoted by Zambia National Broacasting Corporation as saying that, if VAT refunds are processed by the treasury on time, the company can use the money for the ongoing expansion project.
Pascal expressed concern over the new taxation changes. The company has been one of the few urging the government to engage with mining firms, to make changes to the new tax regulations.
Labour Minister Fackson Shamend told the news agency that the government is hopeful of paying the delayed VAT funds through the Ministry of Finance.
Image: Kansanshi mine is claimed to be one the largest copper mines in Africa. Photo: courtesy of First Quantum Minerals Ltd.