FQM DISCLOSES RECORD CONTRIBUTIONS TO ZAMBIA IN 2021
LUSAKA, ZAMBIA – Zambia’s largest taxpayer, First Quantum Minerals (FQM), paid more than US$1.258 billion in public contributions to Zambia in 2021. The total amount equates to ZMW 21.4 billion at current exchange rates, and is made up of taxes, royalties, duties and fees paid to national and local government, dividends to ZCCM-IH, as well as the company’s social investments and infrastructure expenditure in North-Western Province. Despite a decline in Zambian copper production during the year, surging copper prices led to a significant increase in public contributions, from the US$850 million paid in 2020. FQM’s annual Tax Transparency and Contributions to Government Report shows that the largest contributing items to the fiscus were $386 million in royalties (ZMW 6.56 billion), and $368 million (ZMW 6.25 billion) in income taxes.
To put it into perspective, the contribution paid to Zambia represents 81% of the total public contributions FQM paid globally. The company also has operations in Australia, Finland, Mauritania, Panama, Spain and Turkey, as well as exploration prospects in a number of other countries. Originally published to comply with the Canadian government’s Extractive Sector Transparency Measures Act (ESTMA), which requires the reporting of profit taxes and royalties paid in specific countries of operation, the FQM report now goes far further than Canadian law requires. The publicly available report lays bare the full, direct fiscal and economic contribution of the mining giant to each of its host governments.
FQM also voluntarily disclosed that US$76 million (ZMW 1.3 billion) was paid in payroll taxes during the year. Taken together with the US$1.2 billion (ZMW 20.4 billion) that FQM procured from Zambian registered businesses in 2021, these figures illustrate the substantial benefits to the Zambian economy of promoting investment and employment. FQM Country Manager General Kingsley Chinkuli said the mining company prided itself on the significant contribution it had made to the nation’s finances, and through its many social investment initiatives in communities across North-Western Province. “We choose to publish this level of information, because it helps to illustrate the positive impact that responsible mining can have. We also appreciate that mining companies, which are accessing a non-renewable national resource, have a particular duty to be transparent about their contributions to host countries. Read together with our production information and published financial statements, this data provides a window into the workings of each of our country operations, and the group as a whole.”
The Extractives Sector Transparency Measures Act (ESTMA) has since 2015 required Canadian-listed natural resources companies to publicly disclose tax payments made to foreign and domestic governments. The Act illustrates the benefit to countries like Zambia of having responsible investors, listed in jurisdictions with a strong rule of law, that insist upon strong corporate governance and compliance with international standards. FQM strongly supports transparency initiatives and also actively participates in the Extractive Industries Transparency Initiative (EITI) in Zambia, an international standard that requires governments and companies to report key information about the extractive sector.