IT’S BOZA. FQM IS PUTTING BUTTER ON OUR FACES
By Miles B. Sampa, MP
Foreign Mine Investors are like a Religion with one doctrine. ‘Thou Shall be Clever and Pay close to Zero Tax’.
The over $1BN FQM promissory ‘investment’ into our Copper still underground will be spent on equipment and machinery bought from group companies abroad. They also ‘pay’ 16% VAT on their operational costs like ZESCO power, cement or other local goods. Then FQM will claim 16% VAT on their ‘capital goods’ and operational costs. Since ‘their’ Copper is sold abroad, they will pay 0% VAT and then owed hugely (16%- 0%) on VAT Refund from ZRA or our Treasury. As it is, their promissory over $1BN investment is on condition that the Zambian Government starts paying their backlog VAT refund that is in billions from explained book keeping tricks globally called Transfer pricing or ‘Clever’ accounting.
Once ‘refunded’, they will then ship the same equipment out of Zambia to another Country of their Copper ‘investment’ interest to claim similar tax benefits.
Easy money made or taken from Zambians by FQM and zero actual money brought into Zambia by FQM.
This Copper mining industry can be a ‘mafia’ World. One needs welding goggles or reverse sparks can burn their eyes. Yes it’s not a today but historical problem. We tried with the SI 55 about 2012 that got reversed within 2 weeks. Then we tried with the Sales Tax about 2018 to replace VAT for mines but also got reversed within 2 weeks. Yes the Mines ‘Mafias’ are that powerful.
At the rate recent events in the mining sector are going, can our current Government even introduce a single reform that would not be in the interest of these Mine owners but pro Zambians, the answer is a big No. Maybe they are wise. Don’t play with the Mineral Mafias. Safety ‘kulisunga wemwine’. Since Patrice Lumumba Congo DR has permanently been arm twisted on their Copper.
The notion that these Copper mine investors once given tax concessions will help boost our Copper production from below 1 million to 3 million metric tones is a myth.
After 10 years when the tax concession expires, they will bolt (run away) like Anglo America did on KCM, Glencore on Mopani and Vedanta was about to do on KCM by first attempting to arm twist Government and not pay incremental tax. That was when Boma said enough was enough and moved in via receivership to recover ‘hidden’ or withheld tax for Zambians.
It’s a closed global money shop and the Mines Global cartel together with their big ‘uncle’ IMF would and will never allow us to re-own and run Mopani and KCM mines given the sudden surging copper prices arising from the Ukraine war and demand for electrical car batteries made from Copper cathodes.
Meanwhile as at today when Mopani
and KCM are technically being run by our own Muntu Zambians, my estimation is that they are each making about $100 million turnover per month. Both mines have documented copper reserves underground that can be mined for at least the next 25 years. Yet to be detected reserves is another 50 years for each.
These mines are very viable or bankable projects. Zambia can seek capital injections with this ‘viable mines’ story direct from the same global Banks where these briefcase investors borrow from. They come empty handed and use these mines ‘viable story’ to borrow upfront.
I believe and dream however that One day, We will rise like an Eagle to be like the number one global Copper producer Chile based in South America. Chile Copper status was same as Zambia 30 years go but while we have remained at the same level below 1 Mt/a, they are now over 3 millions tones in productions much to the benefit of its citizens. This so only because they were proactive in saying NO to foreign dodgy investors and own most of their Copper Mines.
One day in Zambia oloso, ‘what belongs to Caesar will be paid to Caesar’.
Make no mistake. These Mine Foreign Investors pay a lot of cash dollars to some amongst us to defend them when one amongst us try to speak against their doctrine of ‘thou shall be Clever and Pay close to Zero Tax on their Copper’.
Zikomo🙏🏽 for reading the plain truth anyways.
Together We Can