Mining Rebounds Strongly: Zambia's Mining Sector, Which Recorded a Marked Slowdown in 2008-09 in the Wake of the Global Economic Crisis That Led to the Closure of Some Mining Operations, Has Now Embarked on an Upswing. Nawa Mutumweno Reports from Lusaka

By Mutumweno, Nawa | African Business, April 2010 | Go to article overview

Mining Rebounds Strongly: Zambia's Mining Sector, Which Recorded a Marked Slowdown in 2008-09 in the Wake of the Global Economic Crisis That Led to the Closure of Some Mining Operations, Has Now Embarked on an Upswing. Nawa Mutumweno Reports from Lusaka


Mutumweno, Nawa, African Business


The worst of the global economic crisis now seems to have passed and Zambia's mining industry is set for revival.

There has been a resumption of operations in mining firms that had gone on 'production leave' and new investments in the offing.

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A rise in copper prices was recorded on the world market during the first half of 2009 and most mining companies started to plan for increased production. Out of the 8,500 jobs lost in the mining industry as a result of the global economic crisis, over 1,500 have been regained.

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Total copper production in 2010 is projected to increase by about 5% from a projected 664,000 metric tonnes in 2009, according to the 2010-2012 Medium Term Expenditure Framework and 2010 national budget. However, according to Bank of Zambia official statistics, copper production in 2009 leaped to 675,384 metric tonnes from 587,125 metric tonnes in 2008, representing a 14% rise, despite some mining units halting production. Cobalt production rose to 5,879 tonnes from 4,617 tonnes during the same period under review.

Zambia's revenue earnings from copper sales in 2009 tumbled to $2.9bn from $3.6bn recorded in the previous year despite increased output, according to the Bank of Zambia (BoZ).

The decline in earnings was attributed to falling metal prices, which hit a low of about $3,000 per tonne in the first quarter of 2009 before surging back to the current levels of over $7,000, rallying on the recovering global economy.

Mining prospects in the short term will also be boosted by the production of nontraditional minerals like nickel and coal.

Analysts believe that copper production will hit one million metric tonnes by 2012.

This significant rise in both copper and cobalt output is achievable with the imminent completion of the massive $500m Konkola Deep Mining Project, increased production at other mines and new units coming on stream.

Financial capacity in the gem-stone and nontraditional mining sub-sector should be enhanced with more regulation and fair-value marketing systems to increase investment and value addition.

Zambia's mining sector vision, elaborated in the Vision 2030 document, is a well-organised private sector-led mineral resource exploration and exploitation that contribute to sustainable social economic development. The targets embrace increasing the share of mineral output used in industrial productivity to 30%; geomapping Zambia's surface area; and reducing environmental degradation from mining activities by 75%.

New investments

Positive recent developments in the mining sector include the commencement of exploration works for minerals in Mwinilunga, North-Western Province by Zhonghui Mining Group of China. The firm plans to invest more than $3bn in mining activities on the Copperbelt and North-Western provinces.

Mining operations resumed at Luanshya Copper Mines (LCM) following acquisition of the mine in June 2009 by China Non -Ferrous Metals Corporation (CNMC) of China. Munali Nickel Mine which had also been placed under care and maintenance has also started production.

Konkola Copper Mines (KCM) recently announced plans to invest $170m to build a copper plant with a capacity to process 12m tonnes of refractory ore per annum.

The new plant would be located near its Nchanga mine in Chingola, according to an Environmental Impact Statement (EIS) submitted to the Environmental Council of Zambia (ECZ). Other key developments during the year under review include the opening of the first ever emulsion explosives manufacturing plant in Zambia by Bulk Mining Explosives 9BME) at a cost of $1.2 million in Solwezi.

Extraction of copper ore by Lumwana Development Company on a small scale mining licence in Mwinilunga was approved by the Environmental Council of Zambia (ECZ).

In a bid to revamp operations at the cash-strapped Maamba Collieries Limited (MCL), Nava Bharat (Singapore) Pte Limited was selected to become an equity partner of the ZCCM--Investments Holdings Plc. …

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Mining Rebounds Strongly: Zambia's Mining Sector, Which Recorded a Marked Slowdown in 2008-09 in the Wake of the Global Economic Crisis That Led to the Closure of Some Mining Operations, Has Now Embarked on an Upswing. Nawa Mutumweno Reports from Lusaka
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