The Engineering Institute of Zambia (EIZ) says it is saddened to learn that some mining companies have resorted to scaling down on production and downsizing on employees as a direct response to the 2019 Tax Regime.
In a statement made available to Money FM News, EIZ President Sydney Matamwandi says it will be prudent for the mining companies to reconsider their position by critically re-examine their cost structures and supply chain costs.
Engineer Matamwandi has stressed the need for the mining companies to dialogue at the earliest opportunity to ensure that decisions made do not undermine the national development agenda while ensuring that the viability of the businesses whose taxes drive the economy is not compromised.
He adds that the institution has a keen interest in ensuring that mining companies prosper and contribute to the overall development of the country.
“The mining companies have opted to reduce production and consequently turnover. It is not clear how reduced turnover will increase earnings. It is our view that this action adversely impacts on all stakeholders including the shareholders. We do not see how reduced earnings will benefit shareholders,” he said.
Mr. Matamwandi says the Engineering Institution of Zambia holds the view that it would be prudent for the mining companies to reconsider their position.
He says the mining companies must critically re-examine their cost structures and supply chain costs.
“As an example, there is an opportunity to achieve cost efficiency if the mining companies enhanced buying local services and increased local employee numbers. This approach would be a solid hedge against foreign exchange costs in addition to increasing the competitiveness of local service providers as well as the overall competence of the employee pool within the business environment. All these factors are input into the long term sustainability and competitiveness of the mining companies,” he said.
He has reaffirmed the institute’s commitment to ensuring that the mining companies prosper and that the Government continues providing the services as well as an efficient environment that is the foundation for the long term competitiveness of the mining companies.
He hopes that the mining companies will take up the challenge of exploring and effecting cost efficiencies that feed into the improvement of resource mobilization that the Government has put in place without harming production and mining income.

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