Press Statement by the Permanent Secretary of the Ministry of Mines and Minerals Development Barnaby B. Mulenga on the sampling and valuation of mineral exports

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GOVERNMENT MOVES IN TO CURB REVENUE LOSS IN MINERAL EXPORTS

PRESS STATEMENT BY THE PERMANENT SECRETARY OF THE MINISTRY OF MINES AND MINERALS DEVELOPMENT ON THE SAMPLING AND VALUATION OF MINERAL EXPORTS

The Ministry of Mines and Minerals Development wishes to inform all exporters of metals and other mineral products that, with effect from 1st July, 2020, the Ministry will no longer accept samples submitted by exporters to the Chemistry Laboratory at the Geological Survey Department in Lusaka to facilitate the issuance of export permits.

Currently, every client who wishes to apply for a mineral export permit submits a sample of the export consignment to the chemistry laboratory of the Ministry.

Based on the sample analysis results from the laboratory, a Mineral Valuation Certificate of the entire mineral export consignment is prepared. It is on the strength of this valuation certificate that, after the applicant has obtained a mineral royalty clearance certificate from the Zambia Revenue Authority (ZRA), the Ministry issues a mineral export permit to the applicant.

Unfortunately, this practice has opened a window of opportunity for some mineral exporters to deliberately submit low-grade samples to the chemistry laboratory.

This has resulted in undervaluing of mineral exports and consequently, loss of revenue earned by the government through mineral royalty tax payment. The loss of revenue could amount to hundreds of thousands or even millions of dollars per export, depending on the amount of discrepancy in mineral grade between the submitted sample and the consignment being exported.

In view of the above, the Ministry wishes to put an end to the current arrangement so that Officers from the Ministry will be going to the mine sites and traders’ warehouses to collect the required samples instead of relying on samples submitted by exporters. This decision was arrived at in order to:

i. Earn government a lot of revenue which is currently being lost through some exporters’ submission of low grade samples to the ministry’s chemistry laboratory;

ii. Eliminate the inconvenience of requiring our clients to travel to Lusaka to submit samples each time they apply for a mineral export permit; and

iii. Achieve orderliness in the processing of mineral export permit applications as opposed to the randomness currently prevailing.
iv. Verify the location of the mineral samples and their Mine origin.

In conclusion, it is the desire of the government that the ministry gains full oversight of the mineral supply and value chain in order to ensure effective monitoring of mineral production and exports.

Therefore, in order to facilitate the smooth transition from the current scenario to the new one, all exporters are requested to ensure that their applications for export permits are received by the Ministry at least one week before the officers’ sampling visit to each region.

The applications should state clearly where the export consignments to be sampled will be located, with the applicants’ physical address and other contact details.

Barnaby B. Mulenga
Permanent Secretary
MINISTRY OF MINES AND MINERALS DEVELOPMENT