By Nicholas Bariyo
Canada's Barrick Gold Corp. (ABX) has halted plans to close its
Lumwana Copper Mine in Zambia after the southern African nation
scraped a controversial mine royalty plan, the company said
Thursday.
The world's largest gold producer intends to continue operating
in Zambia, which has an estimated 3.3 billion pounds of proven
copper reserves, days after the Zambian government slashed mineral
royalty fees to 9% from 20%.
The decision will save thousands of jobs and highlights a thaw
in relations between Zambia and mining companies as the country's
recently elected President Edgar Lungu seeks to mend ties with
investors, analysts say.
"In light of the government's recent announcement, we intend to
continue operations at this time," said Barrick co-President Kelvin
Dushnisky. "We appreciate the leadership and engagement of
President Lungu and the Government of Zambia on this matter."
Zambia on Monday scrapped the mining royalty taxation system
that had more than tripled royalty fees in January for open pit
copper mines, ending a months-long standoff with mining
companies.
Barrick had announced in December last year that it would close
Lumwana mine citing the higher royalties. Other miners such as
Glencore PLC (GLEN.LN) and First Quantum Minerals Ltd. (FM.T)
shelved expansion projects worth $1.5 billion, citing the higher
royalties amid low global copper prices.
Zambia is Africa's second largest copper producer after
Congo.
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com
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