Risk of ‘cash grab’ seen as low

“The government accuses a company of a very high, seemingly impossible amount, then a protracted battle across many fronts develops,” Manley said.

First Quantum is the largest copper producer in Zambia, but it also operates mines in Australia, Turkey, Finland and Spain and has a large project under development in Panama.

Pascall said the US$7.9billion fee included a US$150-million assessment, US$2.1 billion in penalties and $5.7 billion in interest. He estimated four to six months to review the bill.

In Zambia, which the World Bank estimated had a US$21-billion GDP in 2016, the economy often rises or falls with copper prices, according to a paper last November by Manley. Authorities have changed the tax code for mining projects nine times in 15 years to follow the price changes, he wrote.

The International Monetary Fund said last October that the cash-strapped country was at risk of defaulting on its bonds.

Manley suggested Zambian Revenue Authorities likely know they won’t receive US$7.9 billion.

“Perhaps the final bill won’t be as high as ZRA is asking, but it at least signals a determined desire from the government to get more First Quantum Minerals’ Kansanshi open-pit copper mine in Zambia.