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PrintZambia, Africa's largest copper producer, has lifted the 10% export levy on unprocessed copper concentrates to allow mining companies to release surplus stocks that have been rising in recent months because of inadequate local treatment facilities.
Finance minister Alexander Chikwanda said in a statement Wednesday that the tax would remain suspended until September next year to allow companies to release excess stocks.
The measure comes as a huge relief to copper miners in the southern African nation, which are struggling because of low copper prices on the international market. In recent months, Zambian miners have been in talks with the government seeking tax waivers and incentives, to help offset the fall in copper prices.
Kansanshi Copper Mines, the country's largest miner in terms of output, said last month that its operations were being jammed by rising stockpiles.
The company, a unit of First Quantum Minerals Ltd. (FM.T), said it had stockpiled about 75,000 metric tons of unprocessed copper concentrate, worth around $133 million, which it could not export due to the levy. The duty on the export of unprocessed concentrates was introduced last year to encourage the development of the country's processing and manufacturing industry.
A ban on exports of unprocessed minerals in neighboring Congo, Africa's second-largest copper producer, is expected to come into effect next year.
Rising copper production is overwhelming Zambia's limited processing facilities, leaving companies such as Kansanshi and African Rainbow Minerals with huge stockpiles.
Kansanshi currently treats its concentrates at Vedanta Resources PLC's (VED.LN) Nchanga Smelter and China Nonferrous Metals Co.'s (8306.HK) Chambishi Copper Smelter, both located in the Copperbelt province. First Quantum is building a $500 million copper smelter in the North Western province as it seeks to limit its reliance on Copperbelt smelters, which are located around 160 kilometers away.
Mining companies operating in Zambia continue to be battered by low global copper prices, which have been weighed by signs of reduced Chinese demand and higher global production. Zambia's copper production is expected to rise to 1.5 million metric tons, from around 800,000 tons produced last year, as more projects come on stream.
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