The Zambia Chamber of Mines has asked the government to extend relief to the extractive sector as a means of incentivising and stimulating production.
In a report released last week titled “The Road to Recovery,” Chamber of Mines CEO Mr Sokwani Chilembo said COVID-19 had mopped up liquidity, and the government and mining houses would do well to bolster co-operation and keep the sector afloat.
“ Across the board, businesses need access to affordable finance, in the form of grants and low interest loans, and relief from taxes – either by having them waived, or at least deferred during the period of crisis, in the form of tax holidays, zero VAT, and the removal of customs duties” Mr Chilembo said.
“These measures would collectively provide liquidity, aid cash flow and business solvency, and ease and encourage cross-border trade.”
He said chamber wanted a durable bond between the mining sector and the government in stimulating economic growth.
“We are capital constrained as a sector, that is why we are asking for space to revive operation through incentives or stimulus. The COVID- 19 crisis is a once-in-a-lifetime challenge and we can do better if we are given these incentives,” Mr Chilembo added.
Mining contributes 80 percent of Zambia’s GDP, with the major product being copper. Zambia is Africa’s second-largest copper miner after the DRC, and is the seventh biggest producer of the red metal globally.
The mining sector also wants a cost-reflective energy tariff in the medium term which should lower the cost of investment and trade while making it easier for companies to employ the right skills.
Mr Chilembo said mining companies – owed more than US$1.5 billion in VAT refunds – were prepared to accept staggered payments but this would government to reciprocate by giving them some form of relief to aid their operations.
Zambia lies seventh among the top-10-global copper producers, the second ranked in Africa after Democratic Republic of Congo. Topping them is Chile, Peru, China, the United States, Australia, Mexico, Russia, and Kazakhstan.