FQM SHOULD OWN UP TO ITS INTEREFERENCE IN ZAMBIAN ELECTIONS, NOT JUST BOASTS ABOUT USD 2.6 BN TAXES
First Quantum Minerals would do well to remain quiet, rather than crow about its so-called “direct economic contribution” to the Zambian economy.
It is foolhardy for FQM to delude itself into believing all Zambians are bamboozled by the figures they periodically bandy about to show what a model corporate citizen it is.
The advantages FQM has culled for itself from the government since 2021 are well known, and have been the subject of on-going political and economic debate. The major observation is that there is little difference between the partnership of mining companies under colonialism and that obtaining between Zambia and FQM today. The only difference is Zambia has political independence today.
Whereas the company has maintained it has not been granted any traditional tax rebates, it has benefited immensely from policy and tax changes introduced for its benefit by the United Party for National Development (UPND) government.
The most significant of these is the government’s decision to give up its 20% shareholding in FQM mining projects, thereby foregoing potential dividend payments, in favour of collecting mineral royalty taxes.
When set against the years of previous depressed copper prices, the paltry mineral royalty taxes are portrayed as a more favourable gain for Zambia. But FQM’s goal in this was not to give Zambia more money. It was to give itself licence to extract Zambia’s mineral resources as they wish, with no risk to its directors. For this arrangement was one of the factors which bought freedom for the FQM Directors, who were accused of diverting more about USD 2 billion from the company’s Zambian operation to Colombia. The deal of converting shareholding to mineral royalty accomplished two things – the two directors who should have been prosecuted for this “crime” gained their freedom and, secondly, FQM no longer has to look over its shoulder when diverting money from Zambian operations to wherever they wish because of the Zambian government’s decision to give up the 20% stake.
There is also the issue of the reported agreement reached over settlement of Value Added Tax refunds from the Zambia Revenue Authority, which has been a subject of some disquiet. But this is a story for another day.
For today, there is a warning for FQM because of its history of interferring in elections in African countries in which they are doing mining operations, especially Zambia and the Democratic Republic of Congo (DRC).
In the DRC, it was the loss of one of its mining licences which forced FQM to engage in activities aimed at regime change. In Zambia, the record shows that 2021 was not the first time FQM put its resources into partisan support for the UPND and Hakainde Hichilema. They did so in 2016 as well, putting resources into an international campaign that was largely responsible for tarnishing the reputation of the government of former President Edgar Lungu. These included the setting up and funding of an online page called openzambia, to give favourable coverage to the UPND. Openzambia still exists today, and carries smarmy content to boost the image of President Hichilema and the UPND government. To date, FQM has not stated whether it stopped sponsoring openzambia or not. If it still does, why should a foreign mining firm be allowed to conduct partisan political campaigns on behalf of one political party? Is this not the shortest route to FQM experiencing mining licence troubles when there is a change of government?
That is why we think FQM should be modest about its boasts of direct economic contribution to Zambia. Unless they show the full extent of what they are making from extraction of minerals in this country. We might just find that this USD 2.6bn is a tiny bit of the colossal profits the company is making from its Zambian operations.
But then Zambians may not know. If FQM Directors could divert billions of dollars from Zambia to Colombia when the government held 20% shares, how much can they divert now that the 20% shareholding was given up?
John 8:32 “And you will know the truth, and the truth will set you free.”
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