While conjecture on the tax status of Vedanta Resources’ mining operation in Zambia (reported here by Reuters) may or may not be close to the bone, it nevertheless comes at a time when voices questioning whether Africa’s leading copper producing country has been getting a fair slice of its mineral resources cake are becoming louder. For instance why, they ask, does copper production, Zambia’s largest industry and earner of foreign exchange, contribute only three per cent of national tax revenue? Perhaps government is now starting to perceive the merit of calls for a mineral tax policy that would strike a balance between generating – and paying – tax while, at the same time, offering attractive investment opportunities. GK
(Reuters) – Diversified miner Vedanta Resources Plc said it was open to a scrutiny of its Zambian copper business, which has faced protests recently over allegedly not paying enough taxes.
The company’s shares were up 2.5 percent at 1077 pence at 1457 GMT on the London Stock Exchange.
Vedanta Chairman Anil Agarwal said on Friday his comments on Zambia in a video circulating on the Internet had been taken out of context.
“I can assure you we have paid our fair share of taxes in Zambia (and around the world) and we welcome any scrutiny of that,” the one-time scrap dealer, who controls the FTSE-250 company, said at Vedanta’s annual general meeting.
Zambia’s mines minister Christopher Yaluma said in May the government would investigate and recover back taxes if it found that Vedanta made more money from its Konkola Copper Mines (KCM) than it had reported.
Hundreds of Zambians protested at KCM’s Lusaka headquarters after the video showed Agarwal boasting of vast profits from the mine, in which Vedanta bought a controlling stake a decade ago.
The business — which accounts for about 10 percent of Vedanta’s revenue — was part of the company’s push beyond its origins in India, but has repeatedly disappointed.
The company reported a 43 percent fall in core earnings at its Zambian copper business for the first quarter ended June 30, earlier this week.
