Project Case Study
Monitoring Zambia's mineral production
Enhancing collection of taxes from mining with effective regulation and monitoring of mineral production
As in many African countries, mining companies in Zambia are often accused of failing to pay enough tax to the host country, and the government is seen as not doing enough about it. Tax collection would be more feasible if there was greater transparency of reporting in the mining sector, especially on production and exports. As Zambia is one of the largest mining economies in Africa, there is huge revenue potential for the Zambian government from mining.
The Enhancing Tax Collection from Mining through Effective Regulation and Monitoring of Mineral Production project formed part of a broader EUR 13 million European Union programme to support Public Finance Management Accountability. The project aims to enhance economic governance in Zambia to make the Ministry a stronger mining regulator. It analysed how to increase transparency in the reporting, receipt and interpretation of the mineral production of the country. This increased transparency will contribute to public comfort that mining companies are paying the royalties they should, and increase the accuracy of revenue collections.
- Improved skills: On-the-job coaching and training of Ministry staff to monitor mineral production, interrogate corporate production reports, and conduct quarterly inspections to all major mines
- Stronger systems, more transparency: All minerals require export permits that are granted by the Ministry of Mines. A modern, digital permitting platform was customised and rolled out in the Ministry of Mines to digitally process applications for export, import and mineral trading permits as well as gold panning certificates. An electronic reporting system was introduced at all major mines in Zambia
- Better equipment: The project procured and delivered brand-new laboratory equipment for the Geological Survey Department to strengthen the capacity of the ministry to monitor the production of mines and gemstone producers in Zambia. The new equipment includes analytical, metallurgical and gemmological technology. The ministry also now has sturdy vehicles for inspections at mine sites
- Improved regulation: Project experts designed an improved reporting format, now used by the mines for their monthly production reporting. This new format makes it possible to trace the production and movement of various intermediate products between mines and processing companies, so that the production, and the royalties due, can be attributed correctly