Wed Oct 5, 2011
* New president has questioned export data
* New guidelines expected by Oct. 16
By Melanie Burton and Chris Mfula
LONDON/LUSAKA, Oct 5 (Reuters) - Zambia's new government has temporarily suspended metal export permits ahead of the release of new guidelines, the mining ministry said in the latest move aimed at increasing transparency in Africa's top copper producer.
Newly elected President Michael Sata has been concerned -- analysts say with good reason -- about copper exporters misreporting the amount of ore leaving the country, and last week said henceforth all export payments would have to be routed via the central bank.
The suspension of permits is another sign of Sata's administration acting quickly on its populist campaign promises.
"All current permits issued by my ministry are immediately suspended pending issuance of new guidelines by the government," Godwin Beene, the permanent secretary at the ministry said in the document, dated Oct. 4 and seen by Reuters.
The new procedures are to be in place by Oct. 16, according to the document addressed to the heads of miners operating in the country, which include Canada's First Quantum Minerals , London-listed Vedanta Resources , Glencore International AG and Metorex of South Africa.
"We are aware of the suspension. For now, I have no comment," the general manager of the chamber of mines of Zambia Frederick Bantubonse told Reuters.
Copper accounts for three-quarters of Zambia's export earnings, but the mining industry contributes only about 10 percent of its tax revenue.
According to Zambian figures, much of the copper exports are destined for Switzerland but little of them show up in Swiss customs data, raising questions about transparency.
Both KCM and Glencore said they would cooperate with the government, but declined to comment further.
Analysts have said a period of uncertainty is likely to follow the announcement of Sata's new government, although they expect him to tread carefully with the vital industry.
Others said the recent changes may hurt Zambia's image.
"Each time another one of these little edicts comes out it chips away at the confidence of the mining companies in the country and (creates) the awareness that it is going to get more expensive, more regulated," Nic Brown, an analyst at Natixis said.
"Mining in Zambia is not going to be nearly as easy as it has been the last few years."
QUICK CHANGES
The 74-year-old Sata swept to power last week on the back of voters looking for change in a country that has seen its economy grow but felt the riches from its mines had not reached the people nor created enough jobs.
Zambia's mining industry aims to double annual copper output to 1.5 million tonnes by 2016 and Sata is expected to try to wring more revenue from it. While investors understand the need for change, the pace worries some.
"A government can't just stop exports while it puts a new policy in place. It's ill-informed, counterproductive and discourages investment," a chief executive of an Africa-based miner said, but declined to be named.
Although only in his job for little more than a week, Sata has quickly moved against the policies of the previous Banda administration, whose Movement for Multi-party Democracy (MMD) had ruled the southern African country for 20 years.
Sata has fired one of its deputy central bank governors, a source said on Wednesday.
Last week he removed respected central bank governor Caleb Fundanga, appointed a new head of the country's anti-corruption agency and disbanded the Energy Regulation Board.
He also scrapped the $5.4 million sale of unlisted Finance Bank to South Africa's FirstRand Ltd and launched a probe into last year's sale of telecom operator Zamtel. (sourced Reuters)
* New president has questioned export data
* New guidelines expected by Oct. 16
By Melanie Burton and Chris Mfula
LONDON/LUSAKA, Oct 5 (Reuters) - Zambia's new government has temporarily suspended metal export permits ahead of the release of new guidelines, the mining ministry said in the latest move aimed at increasing transparency in Africa's top copper producer.
Newly elected President Michael Sata has been concerned -- analysts say with good reason -- about copper exporters misreporting the amount of ore leaving the country, and last week said henceforth all export payments would have to be routed via the central bank.
The suspension of permits is another sign of Sata's administration acting quickly on its populist campaign promises.
"All current permits issued by my ministry are immediately suspended pending issuance of new guidelines by the government," Godwin Beene, the permanent secretary at the ministry said in the document, dated Oct. 4 and seen by Reuters.
The new procedures are to be in place by Oct. 16, according to the document addressed to the heads of miners operating in the country, which include Canada's First Quantum Minerals , London-listed Vedanta Resources , Glencore International AG and Metorex of South Africa.
"We are aware of the suspension. For now, I have no comment," the general manager of the chamber of mines of Zambia Frederick Bantubonse told Reuters.
Copper accounts for three-quarters of Zambia's export earnings, but the mining industry contributes only about 10 percent of its tax revenue.
According to Zambian figures, much of the copper exports are destined for Switzerland but little of them show up in Swiss customs data, raising questions about transparency.
Both KCM and Glencore said they would cooperate with the government, but declined to comment further.
Analysts have said a period of uncertainty is likely to follow the announcement of Sata's new government, although they expect him to tread carefully with the vital industry.
Others said the recent changes may hurt Zambia's image.
"Each time another one of these little edicts comes out it chips away at the confidence of the mining companies in the country and (creates) the awareness that it is going to get more expensive, more regulated," Nic Brown, an analyst at Natixis said.
"Mining in Zambia is not going to be nearly as easy as it has been the last few years."
QUICK CHANGES
The 74-year-old Sata swept to power last week on the back of voters looking for change in a country that has seen its economy grow but felt the riches from its mines had not reached the people nor created enough jobs.
Zambia's mining industry aims to double annual copper output to 1.5 million tonnes by 2016 and Sata is expected to try to wring more revenue from it. While investors understand the need for change, the pace worries some.
"A government can't just stop exports while it puts a new policy in place. It's ill-informed, counterproductive and discourages investment," a chief executive of an Africa-based miner said, but declined to be named.
Although only in his job for little more than a week, Sata has quickly moved against the policies of the previous Banda administration, whose Movement for Multi-party Democracy (MMD) had ruled the southern African country for 20 years.
Sata has fired one of its deputy central bank governors, a source said on Wednesday.
Last week he removed respected central bank governor Caleb Fundanga, appointed a new head of the country's anti-corruption agency and disbanded the Energy Regulation Board.
He also scrapped the $5.4 million sale of unlisted Finance Bank to South Africa's FirstRand Ltd and launched a probe into last year's sale of telecom operator Zamtel. (sourced Reuters)
Posts
No comments:
Post a Comment