Zambia is holding discussions with mining companies to cut mineral royalties for underground mine operations to below 9%.

Zambia Mines Minister Christopher Yaluma said that the latest development will come into force from July.

State broadcaster ZNBC quoted Yaluma saying that underground operations would become cost-effective with reduction in royalties.

In April, Zambia Government set the royalty tax rate for both open-pit and underground mining at 9%.

"Earlier plans were to charge as much as 20%."

Earlier plans were to charge as much as 20%.

Zambia was forced to revise the plan as its previous decision to increase royalties for open-pit mines from 6% to 20% and for underground mines from 6% to 8% in January was opposed by unions and mining companies.

Glencore, Barrick Gold, Vedanta Resources and Canada-based First Quantum Minerals are some of the major foreign mining companies operating in the country.

In April, Zambia dropped its plan to increase mining royalties in a bid to resolve a six-month stand-off with mining companies over the new tax system.

Presidential spokesman Amos Chanda then told Reuters that Zambia’s newly elected President Edgar Lungu directed a panel of ministers to finalise details on the proposed changes prior to submitting their presentation for parliamentary approval.