February 7, 2012 / 3:43 PM / 8 years ago

EXCLUSIVE-Zambia to audit miners, believes up to $1 bln owed

CAPE TOWN, Feb 7 (Reuters) - Top African copper producer Zambia plans to audit all its mining houses in a bid to dig for back taxes of up to $1 billion it estimates it is owed, its mines minister said on Tuesday.

Such a policy by the government of populist president Michael Sata would widen an initiative launched by the previous administration and comes against the backdrop of a surge of resource nationalism across Africa and Zambia’s own doubling of copper royalties to six percent.

“We need to look at what the mining industry has been giving. What we have been told by the World Bank and others is that we did not collect adequate tax,” Wylbur Simuusa told Reuters on the sidelines of an industry conference in Cape Town.

Asked what he believed was owed, he said: “By our calculations it might be between $500 million and $1 billion.”

Simuusa said the government planned to start with the big mining houses and said one auduit was imminent but he declined to name the company.

“So we are now actively pursuing this. We intend to audit all the mining hiuses but we’ll audit the big ones first,” Simuusa said.

According to UK charity Christian Aid, more than half of the copper Zambia exported in 2008 was destined for Switzerland, but according to Swiss import data almost none of this arrived and Simuusa said this trend continued.

This raises a number of transparency issues and activists say copper exported to Switzerland on paper often fetches a lower price than it would if it was exported elsewhere.

“Once it leaves, where does it go? We don’t have a clue,” he said.

Copper producers operating in the country include Canada’s First Quantum Minerals, London-listed Vedanta Resources and Glencore International AG.

Miners in Zambia have themselves said they want independent international auditors to verify they are paying all the taxes that they should. (Reporting by Ed Stoddard, editing by William Hardy)

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