Zambia cabinet approves changes to mining royalties - presidency

Reuters
The Zambian head of state President Edgar Lungu attends the opening ceremony of the 24th Ordinary session of the Assembly of Heads of State and Government of the African Union (AU) at the African Union headquarters in Ethiopia's capital Addis Ababa, January 30, 2015. REUTERS/Tiksa Negeri

LUSAKA (Reuters) - Zambia's cabinet approved changes to controversial mining royalties on Monday after the finance and mines ministers proposed amendments, the president's spokesman said. "This follows extensive consultations with the mining industry in the light of significant changes in the fundamental assumptions upon which the law was based and the sudden fall in the price of copper," the presidency said in a statement. The statement did not spell out the changes. Zambian President Edgar Lungu last month directed the finance and mining ministers to change royalties on mining firms by April 8, saying Africa's second biggest copper producer could consider temporarily reverting to tax regime of 2014. Zambia in January hiked royalties for open pit mines to 20 percent from 6 percent and those for underground mines to 8 percent from 6 percent, provoking an outcry from the industry. Zambia's cabinet will propose details of the changes next Monday before their presentation to parliament for approval. Mining firms operating in Zambia include Glencore, Barrick Gold Corp, Vedanta Resources and Canada’s First Quantum Minerals. (Reporting by Chris Mfula; Editing by Ed Stoddard and David Evans)