INTRODUCTION Foreign companies are bringing in investment and revitalising the industry
Hopes of a return to the glory days

Copper mining is Zambia’s main source of foreign exchange and a major employer.

With world demand for copper reaching new highs, Zambia’s mining sector is enjoying a renaissance that could transform the Southern African nation’s fortunes. Mines that were closed or nearing the end of their life are being revitalised by foreign investment. New mines are planned, and in the new Northwest Copperbelt there are deposits expected to last for 30 to 40 years.
International copper prices have almost doubled over the past two years and demand from the leading consumers – China, the United States and Japan – is expected to remain strong for the foreseeable future.

Zambia’s output of copper is increasing and set to rise a lot further as mining companies from Australia, Canada, Switzerland, India and China pour money into major development projects.

President Levy Patrick Mwanawasa attributes the renewed interest in Zambia’s mining sector to the policies put in place by the government. “We have mining companies from all corners of the world looking for investment opportunities and working in areas which have not been explored before,” he says.

Copper mining is Zambia’s chief source of foreign exchange and a major employer. Production reached its highest levels in the country in the 1970s, when it was in excess of 750,000 tons per year. That changed, however, when copper prices collapsed. Production declined and, through poor management and lack of investment, plunged to less than 250,000 tons per year by the end of the 1990s.

President Levy Patrick Mwanawasa “Almost every province has a mineral resource”

The renewal of the industry today has been made possible by its virtually complete privatisation since April 2000. Serious investors have taken over operations that used to be run by the state-controlled Zambia Consolidated Copper Mines (ZCCM).

Capital and new technology have been brought in to notable effect. Production increased to 410,000 tons in 2004 and is on the way to 450,000 tons annually. New developments are expected to take levels back to more than 700,000 tons per year.

“We are seeing production increase by the day,” says George Chibuye, Chairman of ZCCM’s successor, Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH), which partners the private mining companies through minority holdings.

Data from the Zambian Treasury shows that copper exports earned Zambia more than $564 million (£313 million) in the first half of this year – more than the $508 million (£282 million) total earned for the whole of 2003.

Kalombo T. Mwansa Minister of Mines and Mineral Development “Exploring a promising future”

Confidence in the mining sector has been given a further boost with the recent appointment of Kalombo T. Mwansa as the new Minister of Mines and Mineral Development. Mr Kalombo, who has held high-profile posts as both Home and Foreign Affairs Minister, was given the job by President Mwanawasa in a Cabinet reshuffle in August, a move immediately welcomed by the Mineworkers Union of Zambia (MUZ) and the National Union of Miners and Allied Workers (NUMAW).

The main foreign players in Zambia’s mining sector include Switzerland’s Glencore International (Mopani Copper Mines) and J&W Investment (Chambishi Metals), India’s Vedanta Resources (Konkola Copper Mines), Canada’s First Quantum Minerals (Kansanshi and Bwana Mkubwa mines) and Equinox Minerals (Lumwana Copper-Cobalt Project), Metorex of South Africa (Chibuluma Mines) and China’s Non-Ferrous Metals (NFC Africa Mining).

Zambia has abundant mineral resources, The Zambian Copperbelt is one of the richest deposits of copper in the world, but the country also has other commercially exploitable reserves, ranging from base metals such as cobalt, lead and zinc to precious and semi-precious stones like emeralds, tourmalines and aquamarine.

Copper cathodes in production

President Mwanawasa points out that, with only 55 percent of the country geologically mapped, there is huge potential for discovering new mineral deposits. “Almost every province has a mineral resource to be exploited. A lot of investors are exploring for copper and gold, even in areas where we did not think we had these commodities,” he says.

While major copper mining projects are of primary importance, the authorities are also improving Zambia’s chances of long-term economic growth by diversifying the mining sector in order to develop its potential in other areas. The gemstone industry, in particular, is seen as a sleeping giant.

Government efforts to make the mining process more investorfriendly are continuing. The mines ministry has already been decentralised, regional offices have been established in the principal mining areas to provide advisory and technical services, and a computerised information centre has been set up.