SMM12 18-according to foreign media reports, Zambia has threatened to cancel the work permits of some foreign workers because these companies announced that they are preparing to lay off workers in an attempt to counter the government's proposed tax changes.
Mining companies, including Glencore and first Quantum, have warned that increases in royalties from January 1 will lead to more than 21,000 layoffs. The government wants to rely on operators to help cover the budget deficit, and has accused them of not paying enough taxes in the past.
The International Monetary Fund rejected Zambia's borrowing plan earlier this year and said the country was at high risk of a debt crisis, making it disturbing for investors to hold Zambian debt.
The mining industry accounts for more than 70 per cent of Zambia's foreign exchange earnings and companies operating in southern African countries include First Quantum Minerals,Barrick Gold Corp,Glencore and Vedanta Resources.
Recently, presidential spokesman Amos Chanda said the finance minister had informed the president that she would continue to implement the new taxes in January. "Mining companies have no right to impose their recommendations on the government. As far as the Minister of Finance is concerned, this is a fair tax system. "
Zambia is the second largest copper producer in Africa, with copper production of 850000 tons in 2017, an increase of 10 per cent from 774000 tons in 2016. The country's Ministry of Mining believes that the expansion of existing mines and the production of new mines have contributed to production growth. In the previous three years, copper production in the country fell as a result of falling prices and disruptions in the power supply.
Earlier, Paul Chanda, permanent secretary of the Ministry of Mining and Mineral Development, said favorable international copper prices and new copper mines would increase Zambia's copper production to nearly 900000 tons this year. If the current environment remains unchanged, Zambia will be able to achieve its target of producing 1 million tons of copper annually by 2020.
