Yet Another Mining Company May Back Out of Zambia Due to Taxes

Barrick Gold has announced that it would be prepared to sell their Lumwana copper mine should the government not reconsider its latest policies.

The gold giant has said that ideally they and the government will come to a win win solution that would increase investor confidence in Zambia, but if not they will have to take necessary actions.

Following the first Lumwana board meeting after the merger with Randgold, Barrick’s chief operating officer for Africa and the Middle East, Willem Jacobs, said the company understood the Zambian government was under pressure to increase its revenue.

Barrick, which recently completed $6 billion deal to buy rival Randgold, said it is continuing to engage with the Zambian government to find a mutually beneficial solution for the operation of the mine in the wake of the new tax changes.

But he noted the planned tax changes would put Lumwana in a difficult situation.

“The proposed changes to taxes and royalties would imperil the mine’s ability to sustain returns to all stakeholders, such as the significant contribution of more than $3.3 billion it has already made to the Zambian economy over the past 10 years,” Jacobs said in the statement.

“Given the challenging conditions the mine was facing, all options would have to be considered,” the company said in a statement.