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On Friday Lungu said he gave back the mining licence to Collum Coal Mining Industries after he received assurance that necessary measures were taken to improve its operations.
“The Chinese firm in 2012 persistently failed to comply with mining regulations,” the government press office said.
“As well as failing to provide personal protective equipment to its employees, the company could not afford to pay mineral royalty tax. Lungu warned that the government would not hesitate to close the mine once again if there was no improvement of operations.”
CCMI general manager Xu Jain Xue said the company would invest about $US40 million ($A52 million) in the next four years for infrastructure renovations and development and exploration.
The company aims to expand production capacity from 12,000 tonnes per month to more than 40,000tpm.
More than 10 Collum miners were shot at by Chinese managers in 2010 after labour disputes, the Zambian government said.
