Finance Minister SITUMBEKO MUSOKOTWANE says government converted the 20 percent shares ZCCM-IH owns in Kansanshi Copper Mine-Zamkuwire
Finance Minister SITUMBEKO MUSOKOTWANE says government converted the 20 percent shares ZCCM-IH owns in Kansanshi Copper Mine to a royalty of 3.1 percent because it offers a more profitable revenue stream than the dividends model.
Dr MUSOKOTWANE says this means that whether or not the mine makes a profit, ZCCM-IH will get revenue at the rate of 3.1 percent for everything that is mined from Kansanshi Copper Mine.
He told journalists at a Press briefing in Lusaka that the negotiations to convert the dividends to a Royalty actually started three years ago before the New Dawn Administration took over government.
Dr MUSOKOTWANE noted that under the dividend model ZCCM-IH was not getting any retain on the 20 percent shares it owns in Kansanshi copper Mine because the other owners who control 80 percent of the mine would simply out vote ZCCM-IH on giving out dividends.
He said between 2009 and 2021 ZCCM-IH received 337 million dollars in dividends.
Dr MUSOKOTWANE however noted that had the royalty model been in place between 2016 and 2017 when dividends were not declared, ZCCM-IH would have earned about 671 million dollars.
He said the royalty model is a more predictable, consistent and regular revenue stream for ZCCM-IH compared to dividend model.
Meanwhile, Mines Minister PAUL KABUSWE said the government wants to realign the mining sector to get back into production and out of the courts.
Mr. KABUSWE said the mining sector was in a state of confusion during the previous administration with many disputes surrounding the sector at various levels.
And ZCCM-IH Board Chairperson, DOLIKA BANDA noted that ZCCM-IH wants to optimize revenue retains on its investments in various mines so that it engages in mineral exploration.