Zambian copper output to rise in 2010
Published by MAC on 2010-01-19Source: Reuters
Copper output is rising in Zambia again, but whether that will benefit the country or its people is a moot question. To quote the independent economic analyst in the article below: "Agreements with the mines should quickly be renegotiated because the tax regime [is] more favourable to the foreign investors than the country".
But the recent history of copper exploitation in Zambia doesn't give much cause for optimism.
Zambian copper output to rise in 2010 - Central Bank
Chris Mfula, Reuters
12 January 2010
LUSAKA - Copper output in Zambia, Africa's top producer, rose 19 percent in the first eleven months of 2009 versus the same period in 2008, and production could rise further in 2010, the central bank said on Tuesday.
Copper mining is Zambia's economic lifeblood and the mines are a major employer.
The central bank said Zambia's outlook in the mining sector for 2010 was bright, premised on the rebound of copper prices and the expected increase in copper production after most mining companies completed their expansion projects.
Copper output in the January-November period of 2009 rose to 636,528 tonnes from January to November versus 536,460 tonnes in the corresponding period of 2008. The full year output figure for last year is expected to be published next month.
The central bank last month raised its 2009 copper output forecast to 692,604 tonnes from the previous estimate of 664,000 tonnes following a rise in output at Zambia's mines.
Zambia's central bank, the Bank of Zambia (BoZ), said in a fortnightly report copper exports also rose to 612,021 tonnes between January and November 2009 compared with 517,674 tonnes in the corresponding period in 2008.
Cobalt production in the period under review rose to 5,464 tonnes from 4,324 tonnes and exports increased to 5,275 tonnes from 4,259 tonnes, the central bank said.
The central bank said most mines had increased capacity utilization and production at Lumwana Mining Co. Ltd., a unit of Equinox Minerals (EQN.TO)(EQN.AX), was ramped up last year.
New Capacity
The Treasury said there were prospects of a significant rise in both copper and cobalt output when London-listed Vedanta Resources Plc (VED.L) completes its $500 million Konkola Deep Mining Project (KDMP).
The project was expected to lift production at Konkola Copper Mines, a unit of Vedanta, to 500,000 tonnes per year in 2010 from the current average of 200,000 tonnes per year.
Independent economic analyst, Oliver Saasa said there had been major reinvestment and expansion in the mining sector and copper production was likely to rise to about one million tonnes in the next two to three years.
He said the "agreements with the mines should quickly be renegotiated because the tax regime was more favourable to the foreign investors than the country."
"This (output growth) is very positive for the economy and I would like to urge the government to renegotiate the agreements on tax with the mines so that Zambia can also harvest the benefits of this boom," Saasa said.
Saasa said copper production could have risen to around 800,000 tonnes this year had it not been for the impact of the global recession.
Foreign mining companies in Zambia include Canada's First Quantum Minerals (FM.TO), Glencore International AG [GLEN.UL] of Switzerland and Metorex (MTXJ.J) of South Africa. (Reporting By Chris Mfula)