Zambia ups mining royalties

The finance minister of copper-rich Zambia announced a 33 percent hike in mining royalties Friday, as the government seeks to ease budget shortfalls. Unveiling the 2015 budget Alexander Chikwanda said the government would increase mineral royalties for underground operations from six percent to eight percent. Chikwanda said he wanted to "achieve a more equitable distribution of the mineral wealth between the government and the mining companies."
Open cast mining royalties have been upped to 20 percent and 30 percent tax will now be levied on income earned from processing bought mineral ores. Zambia is Africa's largest copper producer, with trade in the metal accounting for 70 percent of export earnings. The country is growing at a clip, with Chikwanda predicting seven percent growth this year, but infrastructure spending and public sector wages hikes have left the government struggling to balance its books. The minister said increased royalties mean the deficit could be reduced to 4.6 percent of gross domestic product.