LUSAKA, Zambia (AFP) — Zambia on Monday slashed by more than half a controversial mineral royalty tax after investors threatened to pull out of the copper-rich country.

“Mineral royalty tax rate for opencast mining and underground mine operations will be pegged at 9.0 per cent,” down from 20 per cent imposed in January, government spokesman Vincent Mwale said in a statement.

Mining companies had been up in arms after the government raised the royalty levy by threefold from 6.0 per cent.

Canadian mining giant Barrick Gold had threatened to suspend operations and lay off workers at its Lumwana copper mine over the levy.

Zambia’s Chamber of Mines had warned that the taxes would cost the country US $7 billion in output over the next five years — nearly a third of its GDP — and lead to the loss of 12,000 direct jobs in the mining sector.

Zambia is the world’s eighth-largest copper producer.

Government hopes that the revised tax regime will bring stability to the sector, and the economy which has recently seen the local currency, kwacha, lose almost a fifth of its value against the US dollar in the past three months.

Copper prices have slumped in recent months over concerns of an economic slowdown in China, the biggest consumer of the metal.