2019 – The Year the Government Killed the Mines
The year is off to a rocky start. It seems that although there is a strong consensus that job creation must be one of the top priorities for 2019, once again the government is undermining efforts to make this happen.
Lay-offs at the country’s biggest mining projects are taking place while government owes them millions in dollars. Mining is a risky and expensive enterprise and as with all businesses firms invest and operate according to a schedule of predicted costs and profits. Under the PF the mining industry has seen the tax regime altered on numerous occasions, creating continuous uncertainty. Meanwhile poor management of the energy sector has resulted in rocketing fuel prices that have pushed up the costs of production meaning costs have to be cut elsewhere. The result is job losses.
Another bone of contention is the millions owed to the mines in VAT tax refunds. While the government may be reluctant to pay up they are responsible for honouring the terms that they have set these mining companies and in failing to do so they must bear part of the responsibility for the job losses, as well as the reduction in the various related Corporate Social Responsibility projects which are vital in many of these areas in particular when it comes to education.
Mining should be a strong and stable source of revenue for the country, with benefits flowing both through the incomes of those employed by the projects and the royalties that government reaps from taxation. The PF have had 7 years to get their house in order when it comes to the sector, as well as to ensure that the economy is not solely reliant on the industry. Cash-strapped, however, the government is repeating the mistakes of the past. While the mining companies will simply go elsewhere, the biggest losers will be our workers and their extended families whose trade is no longer demanded.