Equinox Minerals Inc. (OTC:EQMIF) shares were down 10% on heavy volumes Tuesday as Zambia gets set for to raise mining taxes this month.
Zambia began enforcing its new tax code today that will see mining firms pay more in royalties and other taxes despite objections that the government has reneged on tax exemption deals with foreign investors.
All foreign firms in the copper-rich southern African nation are required this month to start paying the higher taxes, including Canadian-owned companies Equinox and First Quantum Minerals [FM/TSX].
Equinox's copper production is exempt but its future uranium production would be subject to the tax.
The mineral royalty has increased from 0.6% to 3%. and corporate taxes increased from 25% to 30%. The African country also introduced a 15% variable profit tax on taxable income above 8% and a minimum 25% windfall profit tax.
Yesterday, Equinox shares were down C$0.50 to C$4.38 at 10:30 a.m. ET, and First Quantum shares were down 3% or C$2.57 to C$80.67.