mining
mining

Africa’s second largest producer of copper is reeling under an economic crisis brought about by its dependence on copper and a power deficit.

mining
mining

Low copper prices on the international market have resulted in reduced foreign exchange earnings, resulting in sharp increase in prices of essential commodities.

Nathan Chishimba, the president of the Zambia Chamber of Mines, an industry body representing large foreign mines operating in the country, said the current economic crisis would require the concerted efforts from all stakeholders to diversify not only the mining industry but the entire economy.

“As an industry, we carry the weight of an entire nation on our shoulders in terms of investment, jobs and foreign exchange earnings. We are the basket which holds all the proverbial eggs. Working together we have to create a high growth, diversified economy which spreads risks and opportunities across the economy, creates more jobs and widens the tax base,” he told reporters during a press briefing.

The press briefing, he said, was called to highlight the current global copper crisis and establish if there is hope for Zambia.

According to him, the current slump in copper prices has affected the mining industry in the country which has forced firms to downsize on their workforce, adding that laying off workers has been a painful experience for the industry.

Copper prices have slumped to around 4,600 U.S. dollars per ton from a high of around 10,000 dollars per ton in 2011.

Chishimba said the mining companies had invested about 10 billion dollars into new mining ventures, trebling the country’s annual mining output to about 800,000 tons and increased employment fourfold to more than 80,000.

The mining industry, he said, had also suffered local challenges such as a debilitating power shortage, making the situation worse.

“We suffer from both production challenges, such as old mines, deep ore bodies, low grades, low productivity, and regulatory challenges, for example, a constantly changing policy and tax environment. The effect is twofold our copper is expensive to produce and investors are reluctant to start new mines or expand existing ones,” he added.

Chishimba said the various challenges faced by the mining industry would reduce copper output this year but could not give a definite figure as various mining firms were still reconciling their production figures.

In the 2016 national budget, the Zambian government had projected copper production would reach 808,000 tons in 2015. Enditem

Source: Xinhua

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