A financial Expert has advised that Konkola Copper Mines should be liquidated through the stock markets and should not be run by the state.
Munyumba Mutwale of Nikiwa Capital Partners says mining operations of every country needs to be run by locals in order to retain wealth and keep the flow of currency.
Mr. Mutwale says his organization supports the move taken to liquidate KCM, but says there is need to be careful in how the matter is handled considering that is has to do with sentiment as well and it has the potential to cause short-run pain to the country.
“We do worry about state control, I mean we look at utilities like ZESCO and Lusaka Water, these are not good examples of state control and state management”, he explains.
The fianancial Experts adds that “it’s very dangerous to put these back into the hands of the state because unfortunately, the state has run major companies in an inefficient manner. What we do propose is to try to package these companies, liquidate all these investor positions possibly through the stock market and restrict purchase to Zambian investors.”
Similarly, an economic think tank, the The Centre for Trade Policy and Development (CTPD) has advised that Zambia should be careful in the way it maximises on domestic revenue.
CTPD Policy Lead for Extractives Natalie Kaunda says this should not be done at the expense of efficiency.
Mrs. Kaunda says “while we understand the displeasure from the government over the continued push back by some mining firms on most policy pronouncements meant to maximise revenue collection from the country’s mines, we still feel a cautious approach must be taken to address the matter at hand.”
And the Zambian Youth in the Fight against Corruption (ZYFAC) has advised Zambians to portray the country as an investment partner and not a charitable nation.
Organisation Executive director Maurice Malambo says the country needs to gain profitably from all investments that come in and should not be taken advantage of.
Mr. Malambo says “on the part of KCM management, there’s very limited latitude to maneuver. It is a case of own up or wind up, pack up and leave!”
He has further charged that his organization is aware of some mining companies that influence the pricing of capital machinery and assets and facilitate for capital flights from Zambia.
“This increase in capital expenditure compounds a reduction in the profitability of the mines, in some cases completely eliminating the obligation to meet Company Income Tax and others depending on agreements relating to capital allowances of the investment.” Explains the Executive Director.
According to an application for ex parte order appointing a provisional liquidator for KCM filed on May 21, ZCCM Investment Holdings PLC asked the Lusaka High Court to grant them an order to appoint Milingo Lungu of Messrs Lungu Simwanza and Company as provisional liquidator of Konkola Copper Mines PLC.