- The new tax laws in Zambia could turn out to be a positive for First Quantum Minerals (OTCPK:FQVLF) even as high-cost producers such as Barrick Gold (ABX) begin to close operations, CIBC analyst Tom Meyer says.
- Zambia's budget, which included a revision to the mining tax scheme that would require open pit miners to pay a 20% mineral royalty tax, was passed on Dec. 17 and First Quantum’s stock has come under pressure since ~40% of the company’s operating base is located in the country.
- "As a low cost producer in Zambia, First Quantum could be a net beneficiary of the new system,” Meyer says, adding that a comparison of effective tax rates under the two systems "shows that the new system is increasingly favorable for the miners when the copper price is rising.”