[miningmx.com] -- THE Zambian government has warned the mining and exploration sector that it would lose the right to develop mineral-bearing properties if it failed to develop them timeously.
The state would also implement its new royalties and taxes, increased to 3%, equally over all mining companies regardless of whether previous agreements existed.
These messages were delivered in a speech prepared by President Levy Mwanawasa and delivered by his deputy, Vice President Rupiah Banda at the third Africa Mining Congress, Livingstone, Zambia.
Banda also said government would talk to mining companies that have uranium to form partnerships to exploit those deposits as the state turns its focus more firmly to energy.
As part of that drive towards securing the country’s energy sources, the government is to repeal and replace the Petroleum Exploration and Production Act to clear the way to exploit potential oil and gas deposits within the country, Banda said.
“My country is ready to gives companies the opportunity to invest in the petroleum sector,” he said.
It will call for bids once the act has been changed this year to ensure there is more flow-through of profits to civil society than under the previous legislation.
While there are uranium prospecting licences in issue, none have yet been issued for mining. The government has drafted International Atomic Energy Agency-approved regulations that will be enacted with the new Mines and Minerals Act this year.
Equinox, Albidon and Omega Corp were singled out by the president as those having uranium potential and which the government wanted talk to about taking equity stakes in their projects.
Omega Corp is nearing the end of its feasibility study into a uranium prospect in the Kariba province and government officials would engage the company at the conference about an official acquisition of an equity stake.
Equinox has uranium by-product at its Mwana project and the government has told it to stockpile the uranium-bearing material until an agreement with the state could be thrashed out. Equinox too is not far off completing a feasibility study into mining uranium.
“They are planning to move into mining development and this move will present an opportunity to partner Equinox on uranium mining and processing,” Banda said. Talks would be held at the congress.
Use it or lose it
The Zambia government is implementing a “use-it or lose-it” policy as it tries to shake out those sitting on unused prospecting tenements. “We have conducted a general audit of all tenements to find out whether the licence holders are complying with the Act,” Banda said.
“We have commenced a procedure cancelling licences of defaulters to pave the way for other investors take up those tenements.”
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“The government is determined to open the Zambian landscape to investors and we are cancelling licenses of those not complying with the Act regardless of whether they are holders of small or large-scale mining rights.”
There is a moratorium until March 15 this year to allow defaulters to comply with the law.
The government would make no differentiation in applying new fiscal reforms to companies that had taken over previously privatised companies or those that had started new projects.
One mining executive, who declined to be named, said later the new royalty and tax regime was “one of the world’s worst” and that it altered the way the company views its projects. He stopped short of saying the projects would not go ahead.
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