Zambia mine chamber: ops may scale down over royalty hike

Miners in Africa's top copper producer Zambia may have to scale down operations in the face of a move to raise royaltiestunnel kiln process for sponge iron making by the new government of President Michael Sata, the general manager of the country's chamber of mines said on Monday.

"The increase in mineral royalty will significantly raise costs for the mining companies ... Each mine will have to examine its own cost structure and depending on the impact of the higher tax, some may decide to shut down certain sections," Frederick Bantubonse told Reuters. Sata's government unveiled an expansive 2012 budget on Friday, with big increases in social spending and farming subsidies to be paid for by a rise in mineral royalties and a debut $500 million Eurobond. The budget puts pressure on the mining firms with a doubling of copper royalties to 6 percent. Even before the populist Sata was swept to power in September, the previous administration was aiming to boost...