Zambia is a landlocked country in the part of Southern Africa known as the copperbelt. Zambia’s deposits of copper are of the highest grade in the world and they are currently the 7th biggest producer of copper in the world and the 2nd biggest in Africa.
The Zambian government is currently trying to diversify its economy in order to make it less reliant on its copper industry, however it is still hugely reliant on the success of its copper industry and as a result still very susceptible to a fall in the price of copper on the commodities market.
Investments in the mining sector
Prior to the privatization of the copper industry in the late 90’s the mining industry as a whole in Zambia was in a decline. Privatization however resulted in a huge increase in investment, in fact since the year 2000 the mining industry has attracted investment of over $8 billion and the industry now employs over 80,000 people.
The total amount of investment in the mining sector is expected to exceed $15 billion by the end of 2017, thanks in part to a significant number of new projects due to be implemented in the coming months.
Copper prices and production
Over the last three years’ copper prices have continued to fall on the open market, add to this the challenges created by the electricity crisis in Zambia and it is credit to all involved that copper production has continued to grow. In fact, in 2015 output rose to over 711,000 tons and in 2016 to approximately 750,000 tons.
The Minister of Mines Christopher Bwalya Yaluma has recently stated that he believes that the country is capable of producing as much as 1.5 million tons in 2017 if the Kalumbila mine, a new project being built at the Mopani mine is as successful as forecast, and if a more reliable power supply is achieved. He said : “It will depend on the response of the mining companies — if they all go full throttle; the power goes on and Mopani’s synclinorium goes fully operational.”
Forecasted growth is challenged
A copper analyst based in London has described the forecasted figure of 1.5 million tons as “wildly optimistic” however he has also stated that it may be possible to get close to 1 million tons.
The party manifesto from the ruling Patriotic Front disagrees with this option, in fact it states that copper production could increase to as much as 2 million tons in the next 12 months. It does not however give any details as to how this will be achieved.
Pictures : proactiveinvestors.co.uk and thinglink.com and znbc.co.zm