DIVERSIFICATION A wealth of opportunities and potential lies waiting to be exploited
Much more than just copper

Chris Sealy Manager of the Mining Sector Diversification Programme “We are covering the whole country”

With its economic fortunes so closely bound to the performance of the mining sector and the sector itself so dominated by copper production, Zambia is vulnerable to the fluctuations of international copper prices.

Diversification of the country’s mining industry will increase export earnings and strengthen the economy against external shocks. At the same time, by supporting small-scale mining, it can make an effective contribution to alleviating poverty by creating jobs and spreading wealth.

A Mining Sector Diversification Programme (MSDP) was launched in 2002 with the support of the European Development Fund. A five-year project, its aim is to promote sustainable development of non-traditional mining activities. This means shifting the emphasis away from copper and cobalt towards other minerals and metals, building materials and gemstones.

The potential for non-traditional – that is to say non-copper or cobalt – mining is huge. Sitting astride the mineral-rich Central African Plateau, Zambia possesses an abundance of highly-prized resources, as yet largely unexplored and unexploited, including gold, silver, uranium, nickel, lead, zinc, iron and manganese.

Kennedy Liyungu, Director General of the Geological Survey Department, stresses that there is much more to Zambia than just copper. “We hope that, with new technology and modern techniques, many more discoveries will be made,” he says. Only just over half of the country has been geologically mapped, but more than forty different commodities have been identified.

Zambia has large deposits of non-metallic minerals used by the construction industry, including clay, limestone and gypsum, which are ingredients in the manufacture of portland cement. There is also granite, marble and silica.

One of the most sought-after materials in the world, coltan, or columbite-tantalite, which is used in mobile phones and computer chips, is to be found in Southern Province and the Petauke District, but its potential remains unexplored.

Zambia is already known for its fine emeralds. Indeed, around 54 percent of the world’s emeralds are thought to come from the country – valued at some $3 billion (£1.7 billion) per year. It also produces a wide variety of other gemstones, such as garnet, diamonds, tourmaline, malachite, agate and aquamarine. However, development of the gemstone industry has been held back, by lack of venture capital, and mining and entrepreneurial skills.

Chris Sealy, Manager of the Mining Sector Diversification Programme, says that implementing it is a challenging and wide-ranging task. “We are trying to deliver advice on a broad range of mineral exploitation and mineral marketing,” he says.

“It is a challenge because the mineral resources that we are dealing with – anything which isn’t copper or cobalt – are nationwide. So while we are one of the largest EU programmes in Zambia, we are also covering the whole of the country. Even just in terms of accessibility, there are some areas where our clients operate that cannot be reached at all during the rainy season.”

Committed to providing adequate training in technical, entrepreneurial and marketing skills, Mr Sealy’s team has reached 60 percent of the small-scale mining community. “We have dealt with the basics of their training, and we are hoping to see the same people several times more to build on that,” he adds.

Trevor Robson, Financial Adviser to the programme, says: “In terms of finance, to date our financing facility has provided in excess of 3 million euros (£2 million) to the small-scale mining sector, and other projects are in the pipeline.

“A number of other initiatives are on the table,” he adds. “The small loan facility is going to be very important. At present, the plan is to set aside one million euros (£684,000) to provide finance through an intermediary with experience in small-scale business operations.

“The funds will allow for up to 20,000 euros (£13,500) per loan, which is going to provide a great deal of impetus to the small-scale miners. This is going to be a really important adjunct to the loan facility we have now. In addition, we give support by facilitating partnerships to small-scale and large-scale miners.”