Zambian mines ready to double export earnings

In the 1970s, Zambia was ranked fifth producer of copper, providing 750,000 metric tonnes per annum, competing with Chile and United States.

More than US41.4 billion has been invested in various mining units by among other companies, Glencore AG and Vancouver listed First Quantum Minerals, Vedanta Resources and Australia’s Equinox mining.

This coupled with several other foreign firms prospecting for diamonds, gold and coal with ore content averaging eight per cent, Zambia is headed for improved foreign exchange earning capacity.

Chamber of Mines of Zambia general manager Fred Bantubonse said Zambia’s growth prospects are bright because of the increased copper production and sale to the international metal market.

Bantubonse projects that copper production during the

2006 fiscal year were higher than last year’s, which accounted for 466,000 tonnes.

He said the production levels were likely to double following massive capital investment in the mining methods by the investors in the sector explaining that future prospects of copper production for the year

2009 would swell to more than 800,000 tonnes, given the incentives provided to the foreign firms.

“Future prospects of copper production between now and 2009 are likely to grow by more 800,000 tonnes per annum all things being equal,” said Bantubonse.

The Vancouver and Dow Jones duo listed Equinox’s venture in Lumwana mine in north western Zambia has an estimated lifespan of 37 years.

It would be on stream mid next year after the investors’ complete construction of various production requisites that include a smelter at US$350 million, increasing prospects for Zambia’s increased copper output.

Equinox’s investment in the smelter and in modern mining methods has raised Zambia’s hopes of raking more foreign earnings for the country.

Zambia projects to boost its economy by eight per cent of the Gross Domestic by next year from five per cent recorded last year.

Equinox chairperson Sam Jonah said presently US$80 million has been invested in the project and 50,000 tonnes of finished copper would be produced per annum before doubling up the output.

Equinox would take up to 2017 to repay its debts from its creditors accrued for the setting up the mines.

About 2,000 jobs would be created for Zambians when the mine begins operations next year while undertaking various corporate responsibilities including community participation.

Mwanawasa said recently that his administration was happy with the increased flow of investment in the mining industry but that it desired to see companies diversifying into other minerals with more Zambians owning large-scale mining operations.

Speaking during a ground breaking ceremony at Lumwana mine on August 26 Mwanawasa said “I want to see ownership of Zambians in large-scale mine operations,”

He noted that previously when copper prices were high on the international market; Zambia lost an opportunity to have its nationals own shares in mining operations and urged citizens to take advantage of the prevailing situation.

Under the Private Public Partnership (PPP), the southern African country envisions promoting growth of industry being one of the key foreign exchange earners.

Mwanawasa urged investors and others prospecting for minerals to diversify from copper production and boost platinum, gold, nickel, iron ore, coal, gemstones production.

Zambia envisions growing its economy beyond six per cent of Gross Domestic Product (GDP) during the 2006 fiscal year and increasing to over eight per cent by 2010.

Mwanawasa warned foreign investors against cheats and urged them to partner with the reigning government. “Foreign will be our partners in development. Don’t be cheated that you can do things on your own,” he said.

But analysts urged Zambia to be consistent in its investment policies to boost its economy and retain investors.

The recent anti-investor sentiments ahead of the September 28 elections were a threat to the increased demand of Zambian copper and other precious metals and investors desire an environment of certainty and not speculative.

October 2006
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