KCM remits over K700 million to Government in taxes

Despite the various problems afflicting Konkola Copper Mines in recent months in addition to a commercial standoff with Copperbelt Energy Corporation over US$44 million in energy services, the miner has upheld its tax obligations and remitted over K700 million in taxes to Zambia Revenue Authority two years ago.

Deputy mines minister Richard Musukwa told lawmakers in Lusaka, Sept. 30 that KCM remitted a total of K782,269,066.72 in taxes to the Zambia Revenue Authority (ZRA) and that the company was not selling copper to Vedanta Resources but was selling at the international market on the London Stock Exchange.

Responding to oral questions from who wanted to know the total number of workers employed by Vedanta Resources Plc, whether KCM sold copper to Vedanta Resources, how much copper was sold in 2012 and how much money was paid by KCM in form of taxes to the ZRA in 2012 Musukwa stated that the company had a total number of 7,553 workers as of August 29, 2014.

The lawmakers further sought clarifications as to whether the miner had been audited in view of reports that the company had been undeclaring its earnings in Zambia. Recently, its chairman Anil Agarwal was reported to have mocked Zambians over a US$500 million profit the mine earns in Zambia annually after investing a paltry US$25 million in 2004.

However, Musukwa stated that the Government was working to ensure it cleared suspicions that Kim was under declaring its taxes so that the Zambians get the best in terms of taxation.

Recently, KCM spokesperson Shapi Shachinda lamented that the company was among the highest paying in electricity tariffs in Zambia under the Bulk Power Supply Agreement with Copperbelt energy Corporation, the distributor of power to the mines, which is claiming US$44 million debt from the miner.

In a statement recently Shachinda stated that KCM was facing power restrictions following a commercial dispute between the two parties. KCM now pays more than K700 million (rebased currency) per year in power tariffs.

The dispute follows CEC’s unilateral increase in power tariffs since April 2014 contrary to the provisions of the Power Supply Agreement (PSA) between KCM and CEC. The CEC has also been refusing to generate invoices based on electricity tariffs agreed through the PSA to facilitate payments of bills by KCM for power supplied to the mine, Shachinda added.

It should be noted that prior to April 2014, CEC had increased power tariffs by over 100% in accordance with the PSA and this has resulted in KCM having the highest power tariffs in the mining industry in Zambia.

The restriction in power supply will adversely affect Konkola Copper Mines’ operations and compromise safety of the employees and job security. The operations of the Nchanga integrated business unit have already grossly been affected.

KCM regrets that CEC has chosen not to pursue this matter in accordance with the PSA provisions on dispute resolution.

2017-02-13T05:16:43+00:00 October 1st, 2014|Investee companies, Konkola Copper Mines|Comments Off on KCM remits over K700 million to Government in taxes