October 2, 2018 / 3:36 PM / 2 months ago

UPDATE 1-Zambia mines to pay mineral royalties in dollars to stabilize kwacha

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LUSAKA, Oct 2 (Reuters) - Zambia has asked mining companies to pay mineral royalties directly to the central bank in dollars as one of the measures to help stabilise its kwacha currency , its finance minister said on Tuesday.

The kwacha gained more than 5 percent to close at 11.9500 per dollar on Tuesday after hitting 12.6750 on Monday, its weakest level this year.

Margaret Mwanakatwe said in parliament that pressure on the currency of Africa’s No.2 copper producer had mounted lately due to demand for dollars from importers of petroleum products and external debt servicing obligations.

“One of the key measures that we put in place is that mining companies will pay their mineral royalties in dollars directly to the Bank of Zambia,” Mwanakatwe said.

Zambia said last Friday it will introduce new mining duties and increase royalties to help bring down mounting debt, a move likely to be opposed by mining firms. (Reporting by Chris Mfula; Editing by Tiisetso Motsoeneng and Emelia Sithole-Matarise)

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