First Quantum To Reduce Work Force By 2,500 Due To Government Policy

First Quantum Minerals has announced plans to reduce its workforce by 2,500 local and expatriate employees during the first quarter of 2019, in addition to an unspecified number of contractors.

The redundancies will be achieved in a phased manner.

FQM says the difficult and sad decision to make lay-offs originates from the government’s 2019 Budget, which includes an additional 1.5 percent increase on all mineral royalty tax bands, and an additional two royalty bands of 8.5 and 10 percent when the copper price exceeds 7,500 and 9, 000 US dollars per tonne respectively.

The Company said in a statement that critically, mineral royalties will cease to be deductible from corporate income tax, a measure not seen in other copper mining jurisdictions.

It noted that other measures include the introduction of a yet to be quantified sales tax to replace VAT, meaning companies cannot reclaim tax on input purchases.

The Company said it is thought that this measure will be most damaging to local Zambian mine suppliers.