Zambia is on course to achieve a targeted 1.0 million tonnes of refined copper in three years after resolving a controversy over new mining taxes with foreign investors, Finance Minister Ng'andu Magande said on Wednesday.
Magande said all but two foreign mining firms in mineral-rich Zambia had agreed to pay the increased taxes, after initial threats of litigation in international courts.
A minimum 25 percent windfall profit tax has been enacted.
Industry analysts had warned the government that the foreign mining firms would withhold further investments due to the new taxes, a fear Magande allayed on Wednesday.
Copper mining is looking buoyant and most investors have completed their projects except for the Konkola Deep. We are now working to see how we can deliver 1.0 million tonnes of copper in about three years, Magande told Reuters by telephone.
London-listed Vedanta Resources is investing about $1 billion in the Konkola Deep Mining Project (KDMP) and a new copper smelter.
I think everybody now wants to move on except for two companies that are still asking some questions. We now want them to provide us with their accounts because we feel everyone is making profits as a result of high copper prices, Magande said.
Magande said investors would boost their investments as the country continues to discover more copper ore, contrary to fears that some could walk away.
I don't think anyone who invests more than $200 million cannot earn the money back in four years' time, he said.
Magande said he saw nothing that would stop the Treasury from collecting the targeted $415 million in additional revenue from the mines after the introduction of the taxes this year.
We have not reviewed the numbers (tax revenue) but we should be there, Magande said.
Zambia began enforcing a new tax code on April 1, despite objections that the government has reneged on tax exemption deals with foreign investors.
The mineral royalty has increased to 3 percent from 0.6 percent, while corporate tax on the miners has risen to 30 percent from 25 percent. Zambia also has introduced a 15 percent variable profit tax on taxable income above 8 percent.
The bigger tax bite had outraged mining firms, which said the move could discourage investment in the sector, a major employer in Zambia accounting for a large share of foreign earnings.
Konkola Copper Mines, a unit of London-listed Vedanta Resources Plc, and Mopani Copper Mines, a joint venture of Swiss firm Glencore International AG [GLEN.UL] and Canada's First Quantum Minerals, are among the major foreign miners in Zambia.