VEDANTA RESOURCES
its smelter after reaching a win-win solution with the Government of Zambia over future
VAT refunds.
Following dialogue with KCM, the Government of Zambia has announced that it will resume the refunding of VAT payments made to the Zambian Revenue Authority (ZRA). KCM's CEO Mr Steven Din congratulated the Government: "We believe this is a very good decision by the Government. It demonstrates the value of constructive dialogue and consultation. It is an important move to be made at a time when KCM and the industry are
experiencing extremely difficult business conditions."
The decision comes at a time when copper prices have fallen sharply. Since the start of the year copper prices have fallen by 15%.
In addition to providing improved cash flows at a time of significant business challenges for the company, this decision will enable the company to resume purchasing third party concentrates for its smelter.
During the period when VAT refunds were being withheld, it had become uneconomic for
KCM to purchase copper concentrates from other mines in Zambia. Limited to using
concentrate from KCM's mines, the smelter has only been operating at 50% of capacity. "With issues around repayment resolved, KCM will be able to profitably purchase copper concentrate from neighbouring mines for processing at its smelter," Steven Din said.
"This will expand production and enable increased beneficiation of copper in Zambia."
"However, we have a number of further challenges that need to be addressed. The issue of the refund of past VAT payment needs to be resolved. We hope to see amendments to the new mineral royalties and electricity prices," he added.
President - Group Communications, Public Relations and Communications Manager
Sustainability and CSR Konkola Copper Mines
Tel: +912266461000 Mobile +260 978 871 958 gc@vedanta.co.in
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