GOVT DOESN’T UNDERSTAND VALUE OF 20% FQM SHARES TO ACCEPT ONLY 3.1% ROYALTY
A mining expert has questioned the decision by the government to convert the 20% shares ZCCM-IH stake in Kansanshi mine to a Royalty or revenue share of 3.1%, accusing the government negotiating team led by ZCCM – IH chairperson Dorika Banda of seemingly not understanding the value of governments 20% percent shareholding stake and how much it would accrue in terms of the investment in mine project.
On Tuesday Finance Minister Dr. Situmbeko Musokotwane announced during a press Briefing in Lusaka in the company of his counterpart Mines Minister Paul Kabuswe and ZCCM-IH Chairperson Dorika Banda that his government has decided to covert ZCCM – IH shares in FQM’s Kansanshi mine into a Royalty because it is more profitable that the dividends model.
Copperbelt based Mining expert Mwiya Songolo says government does not seem to understand the value of its 20% shareholding stake and how much it will accrue to in terms of the investment in mine project.
Speaking in an exclusive interview with Zambia Business Times – ZBT, Songolo said First Quantum Minerals – FQM recently announced a Multimillion dollar expansion project at Kansanshi and seems to have done their home work while the Zambian government is clueless on how to benefit from the investment.
He said the royalty model is good but government should have first understood the value that the 20% share stake would have given them before rushing into making a decision of converting it into a meagre 3.1 % Royalty adding that FQM cannot just announce a project of this magnitude without knowing how much they will recoup from it.
