In reaction to the government’s announcement yesterday of the conclusion of an audit report into Konkola Copper Mines (KCM), ActionAid Zambia spokesperson Pamela Chisanga said:
“We commend the government for the speedy conclusion of this audit however it must now share the key findings publicly to indicate whether the issues within the January 2014 audit have been followed up on.
“ActionAid has noted the worrying manner in which companies reduce taxable profits in countries where they generate their revenue. The earlier audit showed that KCM was selling its copper to a Vedanta subsidiary in Dubai – Fujairah Gold – that led to an under-pricing of the copper.
“This is a clear attempt by KCM to reduce its profits. We know how tax avoidance by multinationals happens, and there are clear case studies from Zambia that other countries are now using to identify ways to close these tax loopholes. The KCM audit should provide further evidence that needs to be used to institute measures to curb tax avoidance by multinationals.”
During a briefing with ActionAid in May, Minister of Mines Christopher Yaluma insisted that the government had already undertaken a comprehensive audit of KCM and so another audit was not necessary.
However, Zambia Revenue Authority announced a few days later that it had ordered a new forensic audit. This followed hundreds of protesters marching on the Lusaka headquarters of KCM in a demonstration organised by ActionAid in reaction to a YouTube release of a video of Vedanta’s executive chairman Anil Agarwal, apparently bragging to a trade conference about the huge profits Vedanta makes from the KCM mine, far larger than those publicly reported.
ActionAid is calling on the Zambian government to introduce legislation to mandate the auditor general to audit all mining companies in Zambia