By Nicholas Bariyo
KAMPALA Uganda--Zambia has waived a controversial tax
restriction on copper exports, the country's revenue authority said
Wednesday, ending a near two-year standoff with companies seeking
millions of dollars in unpaid tax refunds.
The rule, requiring mining companies to present import documents
from the country of destination to get tax refunds, will be
scrapped from Sept. 8, ending a spat over more than $600 million in
accumulated value-added tax refunds that had been threatening to
hobble the country's mining industry.
The development comes just a few days after the chamber of mines
warned that copper mining companies are facing a financial squeeze
due to the delayed refund, threatening output and jobs in the
continent's second-leading copper producer.
Glencore PLC Chief Executive Ivan Glasenberg said Wednesday that
the rebates would reinforce the Switzerland-based company's plans
to expand its copper-mining operations in Zambia. Glencore is
implementing a $323 million expansion project at its Nkana copper
mine, which is expected to extend the lifespan of the mine by up to
30 years. The project is expected to come on stream in 2015.
"We've managed to find our way in Zambia. Yes we've had issues
over things like VAT refunds, but it looks like they're resolving
it," Mr. Glasenberg told reporters in Johannesburg.
Last month, hundreds of contract workers at Konkola Copper
Mines, a unit of Vedanta Resources PLC (VED.LN), rioted and
destroyed company property during a protest over delayed wages.
The chamber said the dispute had forced the postponement of
investments worth $1.5 billion in the mining industry since last
year. Companies affected include Vedanta, First Quantum Minerals
(FM.T), Glencore PLC (GLEN.LN) Barrick Gold Corp. (ABX).
Last week, Zambia's finance minister, Alexander Chikwanda, said
that the rule was undermining confidence in the country's
economy.
Analysts say that Zambia, which last year lost its position as
Africa's top copper miner to Congo for the first time since 1998,
is likely to reclaim its position this year, as miners continue to
deliver output from projects implemented during the global
commodities boom, which peaked in 2011.
--Patrick McGroarty in Johannesburg contributed to this
article.
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com
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