Summary Zambia tripled mining royalties to 20 percent from six percent on January 1
LUSAKA (AFP) - Zambia s newly-elected President Edgar Lungu initiated Tuesday talks with mining companies over a controversial tax increase in an attempt to calm investor nerves.
Zambia tripled mining royalties to 20 percent from six percent on January 1, putting the government at loggerheads with mining firms already buckling under a fall in global commodity prices.
While on the campaign trail, Lungu had promised to maintain the increased taxes despite threats by mining firms to cut jobs and investment.
A delegation led by Zambia Revenue Authority chief Berlin Msiska has been tasked by Lungu to "expedite dialogue with mine owners and promptly resolve the impasse over the new mining tax regime," said a statement from the president s office.
It said the decision came after Lungu addressed a special session of cabinet "to consider the impasse over the new mining tax regime and the outstanding VAT refunds for mining companies."
It was not clear when the talks will take place.
Lungu s rival in the January election, Hakainde Hichilema, had promised to reverse the tax regime, calling it business unfriendly.
Cooper mining, the backbone of the southern African country s economy, was expected to be hit the hardest by the regulation.
Copper contributes around 70 percent of foreign exchange earnings, in a country ranked among the world s most poverty-stricken nations.
The country is the world s eighth largest producer of copper -- a metal used in plumbing and heating pipes, and electrical and telecommunications wiring.
