Patson Chilemba
Former Finance minister Ng’andu Magande says he is not an empty bucket where all water has run out, even if people don’t think he can be useful, saying “but one time or another there are certain things which we can’t tell them in public.”
And Magande says there is no harm in government coming up with a new policy structure of 50-50 shareholding in mining ownership, adding that Zambia is losing approximately $25 million every month as the country is unable to join in the current value chain, where the price of copper has gone to just above $10,000 per tone.
Speaking with Daily Revelation, Magande, the Finance minister under late president Levy Mwanawasa, who oversaw the introduction of Windfall tax on mines when the copper prices were booming as they are now, indicated that he had more to offer in terms of advice, particularly over the issues of mining but it was up to those in government to show interest and they know where he lives.
“But why should I go to government? Why can’t the government come to me? It is easy to find Mr Magande’s house than for me to find Ministry of Mines and Minerals. I don’t know where they are. I haven’t been around Ridge way for sometime not. So I start going around, hobbling and looking for people to advise,” Magande said. “It has never happened that way. But what would I be wanting to, I have already been overseas, I worked for an international organisation of 71 countries for three and half years. So what would I want to go and do there again? I have been working with World Bank for so many years, although not openly, but I have done some consulting work in some of their places.”
He said he was very much around to offer help in anyway he could.
“So I am around and if people think I am just a bucket where all the water has gone out, let them think so. Yah! But if you see the Mineral Act of 2008 it was during my time and Mwanawasa’s, and we told the officers ‘you have to be dedicated, we want to come up with something that will last’,” Magande said. “You can imagine if the Windfall tax was not removed, immediately Mwanawasa disappeared and I disappeared they actually removed the Windfall tax. By now how much money would we have been getting every years? Millions and millions.”
He said, over concerns about mining companies hiding the true value of their mining activities, the government of late president Mwanawasa introduced the Extractive Industry’s Association, saying right now figures in terms of how much has been mined by each mine and where the quantities were sold and amount of money realised could be shown.
“It’s a pleasure to discuss all these issues and we will continue to talk even if people don’t think we can be useful but one time or another there are certain things which we can’t tell them in public,” he said.
Magande explained that the current problems in the mining industry now stemmed from the sour relationship between the mining firms and the previous government, which resulted in problems at Mopani and KCM.
He said as a result, some were stopped from coming into the country while the others froze their investments and left.
“And even the new government now has not come up with a specific policy strategy of how to handle the mining industry. As you have seen in the last few months Honorable Kabuswe has been going all over, and everywhere in the country, there is a mine somewhere and to reorganize these mines it’s going to take a bit of time, in fact he said it himself they have done an audit,” Magande said. “He even said there are people with faulty licenses and they are not mining and just blocking others who may have money to invest.”
He said unfortunately Zambia is missing approximately $25 million every month as the country was unable to join in the current value chain where the price of copper has gone beyond $10,000.
“So unless the new government therefore can find some people who can advise them on how to go about this, it is going to take us through some period of losing this money since we don’t have the capacity to do anything. In fact I remover the minister said even if somehow we are able to do it ourselves as government we would still need 3-4 years before actually the investment becomes productive,” Magande said. “But he said at the moment as government we don’t have the money, so it will take the government time to look for people that have money to invest and then from the we should be saying perhaps in three-four years time that’s when we are going to benefit by taking that copper for sale.”
He said the future opportunity for copper mining was there as the price is projected not to be less than $16,000 per tone, with the introduction of electric cars, but to achieve those long term goals it requires something to be done now, which will also require that right people are put in place, as even if the country had gone the way of nationalising, the path PF was on, money would have simply been going into peoples private accounts.
He said there were very few people who were as faithful as the Francis Kaunda’s, who managed the copper mining industry in the country during the heydays of ZCCM.
“They will be taking some of this money and hiding in their accounts. So who is going to benefit? The Price of Nikel now in Munali is about $30,000 per tone, about two weeks ago it had risen to $100,000 per tone. But we have somebody who is doing it there, I think some Chinese they revived it, but they are not being encouraged to make a big big show of it,” Magande said. “The new government must come up with a favourable mining strategy and mining policy. When you are talking about the Windfall tax, when we brought the Windfall tax we just didn’t deal with that, we dealt also with other issues. So the Mines and Minerals Act of 2008 was not just about windfall tax. It covered even the question of what is the benefit of the local people? In that Act you find that we dealt with that.”
He said in the same Mines and Minerals Act of 2008, the government provided for beneficiation, to encourage people to go into the industry of manufacturing from the local raw materials.
“By that time we were even thinking about starting with some interested partners to come and start manufacturing, because we have too many cars now and we are still ordering even the simplest spare parts, the exhaust parts and so on. So it has to be, like I said a very comprehensive mining strategy and then from there government comes out with policies,” said Magande. “There is no harm even saying now anybody who comes we are going go for 50 – 50 percent so that people have no doubt at all when they are coming to the country, they know the shareholding now is 50 percent. And then from there you put the right people in the boards who represent government and who will be there to say don’t do this or you do this.”
