African Press International (API)

"Daily Online News Channel".

EU geared to have copper contracts reviewed

Posted by African Press International on March 31, 2007

Lusaka (Zambia) The European Union Saturday joined other international organisations and stakeholders in urging the government of Zambia to review the contracts it had entered into with the new owners of the country’s copper mines.

Privatised nearly seven years ago, the Zambian copper mining industry is now doing well largely due to exceptionally high world market prices for the metal.

This is however now causing various organisations to scrutinise the contracts the government entered into with the new buyers of the mines.

Under the existing agreements, the government offered the new investors large concessions and charges a modest tax on profits called a mineral royalty.

However, the country is reaping modest profits from international copper sales even with world copper prices at an all time high, as the private owners of the mines are not obliged to return their profits to the country.

The World Bank was the first institution to call on the Zambian government to re-negotiate the deals with a view to accruing high benefits from the profits.

The leader of an EU delegation currently in Zambia, Derek Fee, said Saturday that the time has come for the government to revisit the deals so that the benefits of the high world market prices accrue to Zambians rather than just the mine owners.

The government has shown a reluctance to renegotiate the deals, claiming the contracts were legally binding and cannot be changed.

The Zambian Chamber of Mines, which represents the mining companies has indicated it will begin arbitration proceedings against the Zambian government should it go ahead to cancel the contracts.

The Zambian business sector has however dismissed the reasons being advanced by both the government and the mine owners as being invalid because they said the government had the power to change the deals without getting into a legal battle.

Published by Korir, African Press in Norway, apn, tel +47 932 99 739 or +47 6300 2525 source.apa

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