• Government will also continue working with gold mining companies.
• Government will continue to collect mineral royalty in line with international best practice.
• Companies will now be allowed to deduct the mineral royalty as a normal business expense
Ministry of Finance and National Planning says Bank of Zambia has so far purchased 282.79 kilograms of gold since December, 2020, at a cost of K345.6 million.
In a statement, the Ministry explained that Gold weighing 195.95 kilograms was purchased from Kansanshi Copper Mines at a cost of K241.8 million, while 86.84 kilograms was purchased from Zambia Gold Company, a subsidiary of ZCCM-IH, at a cost of K103.8 million.
It revealed Central Bank planned to purchase approximately 25, 200 ounces of London Good Delivery Gold from Kansanshi Copper Mining Plc and 21, 000 ounces of dore gold with a minimum of 88% purity, from Zambia Gold Company, per year.
The Ministry said these estimates are based on the gold purchase agreements signed with Kansanshi Copper Mining Plc and Zambia Gold Company in December, 2020 further pointing out that the objective of this initiative is to shore up and diversify international reserves.
According to the Ministry, “The viability and attractiveness of this venture is that the gold is being purchased in local currency.”
The Finance and National Planning Ministry had since stated that government will also continue working with gold mining companies to support the further development of a safe, transparent, and domestic revenue enhancing industry.
Ministry of Finance further indicated that Government would continue to collect mineral royalty in line with international best practice.
The Ministry however said contrary to the previous mining tax regime, companies will now be allowed to deduct the mineral royalty as a normal business expense under the Corporate Income Tax regime.
“Mineral Royalty is a payment received by Government as consideration to extract minerals,” the Ministry noted
It explained that this would encourage further investment into the mining sector and consequently improve mining productivity, export earnings, and employment opportunities for Zambians.