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Mining
Established in Sweden in 1873, Atlas Copco is a world-leading provider of industrial and mining equipment. spoke to Daniel Banister, Regional General Manager of the Zambian branch, about the company and its leading position in the copper mining sector.
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s the second largest copper industry in Africa, Zambia produced 730,000 tonnes in 2014. While this was a fall of 30,000 tonnes from the previous year, largely due to prices driven down by a slowing Chinese economy, this still represents a vital part of the country’s exports. Combined with cobalt mining, Zambia’s copper production fuels around half of Zambia’s economy, yet contributes only 30% of the government’s tax revenue. In an attempt to combat economic downturn and close up the budget deficit, Zambia’s government scrapped corporate taxes in October but demanded instead a large increase in royalties — 20% of revenue for open-pit mines, and 8% for underground mines. As is to be expected, this caused a lot of friction between Zambia’s Chamber of Mines and the key players in the copper mining industry. However, this week, the government is preparing to roll back these changes in a hope to prevent further losses to both profits and production. Having been present in the country since 1949, Atlas Copco Zambia has seen the climate change quite substantially over the years.
“We have gone through many challenges, not only in Zambia, but globally, and we have learned from those experiences. Being flexible and having the ability to adapt quickly when these business cycles arrive is why we are still here,” says Banister. “Focusing on what our customers require and providing an innovative solution is critical.” It’s not just the mines that have been affected by the tax hikes. Companies like Atlas Copco that supply the industry with products and services have also been affected.
“The future looks bright, we have the products and organisation in place to make a difference to our customers total cost of ownership, which is beneficial to operators across the industry “CAPEX from the mines has dropped significantly since 2013 which has an impact on all of us. Having said this, we are a flexible organisation and quick to adapt to the current business climate,” Banister tells us. “We continue to invest in areas that we see beneficial for the group and which add value
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to our customers. It has also presented us with an opportunity to look internally at our own processes and address what is needed to be more efficient.” Now that the mining industry has reached an agreement with Zambia’s government over the taxing situation, things are looking up. The new compromise — which will see corporate income tax reinstated and royalties slashed — will come into effect from 1st July, after a nine-month standoff. But with the government still owing almost $800 million in value-added tax refunds, the relationship between Zambia’s mining industry and its government is far from perfect.
“Being flexible and having the ability to adapt quickly when these business cycles arrive is why we are still here
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Daniel Banister, Regional General Manager, the Zambian branch of Atlas Copco
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“In essence the government has agreed that the timing of a new tax structure is not good, based on the current global copper price, and they have agreed to revert back to a two tier tax system,” explains Banister. It’s possible that, after the dust has settled, these tax changes will help forward Zambia’s drive for economic development.
I do believe that with the right policy and stability in the policy-making Zambia is an attractive country for foreign direct investment (FDI). Diversity will also be crucial in Zambia’s economic development”
“I do believe that with the right policy and stability in the policy-making Zambia is an attractive country for foreign direct investment (FDI). Diversity will also be crucial in Zambia’s economic development,” he says.
discuss new ideas for the future with our clients,” he tells us.
“The future looks bright, we have the products and organisation in place to make a difference to our customers total cost of ownership which is beneficial to operators across the industry.”
“Our focus remains fixed on providing our customers with a lasting solution for their
Meanwhile, Atlas Copco Zambia recently exhibited in this year’s CBM-TEC — the Copperbelt Mining trade expo and conference — where they showcased new product development with existing and potential customers. “We have and will continue to exhibit at CBM-TEC as I firmly believe that we have an opportunity to network and
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This customer-centric approach to business appears to be integral to Atlas Copco’s success, and is something of an ongoing priority for the firm.
Mining
sustainable productivity,” says Banister. “We will continue to focus on competence development when required to ensure we have a strong technical team. It is incredible how quick the first half of the year has passed us by, as an organisation, we are excited for what the second half will bring and fully prepared.”
email: production@essentialbusinessmag.com
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Atlas Copco Postal address: SE-105 23 Stockholm Telephone: +46 8 743 80 80 Fax: +46 8743 92 46
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www.essentialbusinessmag.com ŠEssential Business Magazine 2015