SNL Metals and Mining, a global mining information and analysis company says Zambia might regret implementing the new mineral royalty tax regime.
SNL Metals and Mining resources policy analysts Asa Borssen has told Reuters that There are benefits to implementing a royalty system in this kind of governance environment in developing countries but it has to be reasonable in comparison to other tax environments.
Borssen says Zambia will lose out on revenue as companies will move their investments elsewhere.
Borssen notes that if companies start to see other countries as a better match for their investments then those will be moved to where the rate of return is the most favorable, citing the neighboring Democratic Republic of Congo.
Government has maintained that the new mining tax regime is final. Copper prices are currently around $5,700 per tonne.