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The Zambia Metal Fabricators (ZAMEFA) says it is concerned that local value addition to Copper continues to be low, estimated at five percent.
ZAMEFA Managing Director, Kangwa Bwalya, said the company is hopeful that government will help the sector grow.
He said this during a Zambia Association of Manufacturers (ZAM) Pre – Budget Meeting in Lusaka on Friday.
Bwalya said government can address the challenge around the pricing of copper for domestic use, despite copper being priced using the London Metal Exchange (LME).
He said the price of the London Metal Exchange considers freight and other charges of moving copper from the mine site to an LME approved warehouse.
Bwalya said Zambia does not have such warehouses which makes it logical that the local manufacturers who collect copper from the mine site should get the full credit which is embedded in that LME price as a deduction.
He said this is because the producer of the copper is not incurring additional costs of moving the material from the site to an LME approved warehouse.
“Our appeal is that government can find a mechanism for enforcing that way of trading. At the moment, we negotiate on a one on one basis and there is no solid framework around it and we shall be happy to support that,” Bwalya said.
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He also said the Metal Fabricators Sector would want government to address the Financial Reporting issue in foreign currency for big exporters like ZAMEFA.
“At the moment, the Income tax allows mining companies who earn more than 75percent of their revenue in foreign currency, to prepare their Financial Reports in US Dollars,” Bwalya said.
He said the mechanism helps exporters to avoid exchange losses in an environment where the currency fluctuates as the case has been in the recent past.
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