Zambia appoints new team to resolve mine royalty row

12 March 2015 (Last Updated March 12th, 2015 18:30)

Zambia President Edgar Lungu is looking to resolve the country's mine royalty row and has appointed a team to end a stand-off with mining firms.

Zambia President Edgar Lungu is looking to resolve the country's mine royalty row and has appointed a team to end a stand-off with mining firms.

The latest decision is expected to prevent impending job cuts as well as mine closures.

Earlier in 2015, Zambia increased mineral royalties for open-pit operations to 20% from 6% threatening foreign investment in the country.

"Mining companies are making recommendations, which will be evaluated by the committee and we hope that this matter can be put to rest by the end of this month."

The increase in royalties are said to have caused friction between the government and mining firms that are currently facing a decline in global commodity prices.

Lungu directed the government to engage with mining firms and further said he would not allow a single mining job to be lost.

Lungu spokesman Amos Chanda told Reuters: "Mining companies are making recommendations, which will be evaluated by the committee and we hope that this matter can be put to rest by the end of this month."

Last month, Lungu initiated talks with mining companies to resolve tax and royalty issues.

Zambia's Chamber of Mines said in December that the new royalty limit may result in closures of shaft and lead to loss of around 12,000 jobs.

Lusaka relaxed rules last month that have saved $600m in tax refunds that are being paid to Glencore and Vedanta Resources, the news agency said.