Pressure mounts on Zambia to reduce royalty increase


Zambia's government is under increasing pressure from the mining sector to reduce the royalty increases introduced at the beginning of this year. The government royalties on open-pit mines increased from 6% to 20% and has received fierce criticism from mine operators in the area.

Two major stakeholders include First Quantum and Barrick both who have mines affected by the royalty increase. 

Barrick has already announced that it will suspend operations at its Lumwana copper mine, which puts the jobs of 4,000 workers at risk. The company says it will begin laying off workers in early March and will cease activity the mine by June.

It is thought that the government won't make any changes before the elections on the 20th January, despite opposition leaders pledging to reverse the increase if they are elected.

Philip Pascall, First Quantum’s chairman and chief executive, also voiced his concerns, saying he is worried that the tax rules are being changed “at a time when stability in mining fiscal policy is crucial.”

First Quantum is already holding back on potential investment in the region amounting to $1billion (USD).