zambia mining roundtable
DESCRIPTION
Zambia Mining Roundtable Hosted by Hon Richard Musukwa, MP - Deputy Minister of Mines, Energy and Water DevelopmentTRANSCRIPT
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PRESENTATION BY
HON. RICHARD MUSUKWA, MP, DEPUTY MINISTER OF MINES, ENERGY AND WATER DEVELOPMENT
DELIVERED DURING THE ZAMBIA ROUNDTABLE ON MINING HELD AT THE MINING ON TOP AFRICA – LONDON SUMMIT
(25TH JUNE, 2014)
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OUTLINEGeneral Information on ZambiaMining Industry OverviewMineral/Petroleum PotentialMineral Development StrategyMining Fiscal RegimeMining LegislationInvestment Opportunities in the Mining
SectorReasons for Investing in ZambiaConclusion
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WHERE IS ZAMBIA? General Information
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MOZAMBIQUEZAMBIAANGOLA
DRC
NAMIBIA
SOUTH AFRICA
TANZANIA
• In the Heart of Africa
• Landlinked
• Size: 752,614 sq.km
• Population: 13 million
• Tropical Climate
• Major Economic Drivers:
1. Mining2. Agriculture3. Tourism
Madagascar
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MINING INDUSTRY IN ZAMBIA - BRIEF OVERVIEW Mining in Zambia has been predominantly for copper and
cobalt.
Since the first major phase of mining of the Cu-Co mineralization of the Copperbelt in the 1930’s, the mining industry has been an essential and integral component of Zambia’s economic development
Mining contributes up to 80% of foreign exchange earnings.
Zambia ranks as the second largest producer of copper in Africa and one of the world’s largest producers
It is estimated that Zambia has sufficient resources for production to continue for at least 50 years but new discoveries are being made all the time.
Zambia possesses one of the world’s most vital and complex metallotects.
It has a wide variety of other minerals, such as precious metals, gemstones, industrial and energy minerals, and ferrous metals2
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MINERAL POTENTIAL IN ZAMBIA
D
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MINERAL POTENTIAL IN ZAMBIA con’d
BASE METALS COPPER COBALTTo a lesser degree (largely mined out) LEAD ZINC MINOR METALS TIN & TANTALUM RARE EARTH ELEMENTSPRECIOUS METALS GOLD SILVER PLATINUM GROUP ELEMENTSINDUSTRIAL MINERALS LIMESTONE & DOLOMITE CLAYS/ALUMINOSILICATES TALC/BARYTE/FLOURITES ZEOLITES SILICA SANDS/FELDSPAR
GEMSTONES EMERALD AQUAMARINE TOURMALINE GARNETS AMETHYST
DIAMONDS
FERROUS METALS IRON ORE MANGANESE NICKEL
ENERGY MINERALS URANIUM COAL COAL BED METHANE OIL AND GAS
Zambia has the following minerals:
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PETROLEUM POTENTIAL
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MINERAL DEVELOPMENT STRATEGY
To intensify exploration for the development of new mines in order to increase and diversify mineral and mineral-based exports and maximize long term economic benefits to the investor and Zambia.
To intensify exploration of the energy minerals, in particular oil and gas for the development of the petroleum and energy industry in Zambia.
To add value to Zambia’s amazingly wide spectrum of minerals resources
To create manufacturing industry to produce mining industry consumables.
To attract Direct Foreign Investment to be able to realise above objectives.
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MINING FISCAL REGIME
30% Corporate Tax;
6% Mineral Royalty
15% withholding tax on interest, dividends, royalties, management fees and payments to affiliates or subcontractors in the mining sector
25% capital allowance deductions for the mining sector
Capital expenditures on new projects are ring fenced and only become deductible when the projects start production
15% variable profit tax on taxable income which is above 8% of the gross income
10% Property Transfer Tax on Transfer or Sale of Mining Rights
VAT refund period for exploration is 7 years
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MINING LEGISLATION
The principal mining law is the Mines and Minerals Development Act of 2008.
This Act is currently undergoing review to align it to global trends.
Other legislation includes the Mineral Royal Tax Act, Petroleum Act, Explosives Act and the Environmental Protection and Pollution Control Act.
INVESTMENT OPPORTUNITIES IN THE MINING SECTOR
The following are some investment opportunity sectors :
Manufacturing of the following engineering products: copper products; iron and steel; cobalt; and other engineering products
Beneficiation of phosphates and any other related material in fertilizer – the case could include manufacturing of Fertilizers from Natural Gas
Development of Manufacturing facilities based on industrial minerals such as activated clays, bentonitic clays, fluorite, gypsum and baryte for various industrial usage
Down-stream processing of gemstones, industrial minerals and dimension stone: With abundant occurrences of industrial minerals, there is a major gap investment in this sector
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REASONS FOR INVESTING IN ZAMBIA
A rich mineral resource base providing business opportunities in a country which is Investor-friendly
An enabling Investment Policy that provides incentives
Political Stability
Adequate Infrastructure
Favourable Climate
Rich skilled and trainable human resource
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CONCLUSION
The Zambian Government through the Ministry of Mines, Energy and Water Development in particular welcomes investment in the development of its Mineral Resources.
The Zambian Government is particularly focused on diversifying the mining sector to include mining of minerals such as uranium, coal, manganese and industrial minerals, natural gas and petroleum, in addition to the copper and cobalt.
The Zambian Government has created the necessary environment for investment in the mining sector.
I therefore wish to invite both junior and large mining companies to invest in Zambia.
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I THANK YOU FOR YOUR ATTENTION !ZAMBIA…….. AFRICA’S
BEST INVESTMENT DESTINATION