Zambiawatchdog reports on 18 December 2014 in ‘Process to suspend Lumwana mine operations begin’ that: ‘While the people charged with responsibility to run affairs of the country are busy fighting for power, Barrick Gold Corporation has started procedures to suspend operations at the Lumwana copper mine in Zambia following the passage of legislation that raises the royalty rate on the country’s open pit mining operations from six percent to 20 percent.
Thousands of Zambians will lose jobs and affected families are simply enormous. The new taxation regime, which is expected to go into effect on January 1, 2015, eliminates corporate income tax, but imposes a 20 percent gross royalty on revenue without any consideration of profitability. “The introduction of this royalty has left us with no choice but to initiate the process of suspending operations at Lumwana. Despite the progress we have made to reduce costs and improve efficiency at the mine, the economics of an operation such as Lumwana cannot support a 20 percent gross royalty, particularly in the current copper price environment,” said Co-President Kelvin Dushnisky’.