Zambia rides copper prices boom
[Some factual errors, but interesting nonetheless - TSL]
LUSAKA (AFP) -- A global boom in copper prices is firing Zambia's economy, resulting in huge flows of foreign investment in its mining sector and creating jobs, analysts say.
Copper rocketed to 7,385 dollars (5,880 euros) per ton on the London Metal Exchange (LME) on Wednesday -- the highest point since the metal was first listed in 1877. On Friday afternoon the metal traded at around 7,095 dollars.
One of the world's top copper producers, landlocked Zambia is a poor southern African country where some 70 percent of its 11 million-strong population live below the poverty line.
Copper earned 510 million dollars in 2002 and by 2004 generated more than one billion dollars, according to the latest government statistics.
"The direct contribution to the treasury will now increase following good performance by most mining companies and the improved metal prices," Frederick Bantubonse, Zambia's Chamber of Mines general manager said last week.
Copper's bullishness in international markets is a huge boon for Zambia, which suffered a major crisis in 2002 when South Africa's Anglo American pulled out of the country's mining sector, citing low copper prices.
-------Mining sector
Bantubonse told AFP that "this increased activity in the mining sector will result in employment creation and overall growth in the economy."
The major inflow of capital in the mining sector has contributed to the appreciation of the local currency, kwacha, in recent months.
Konkola Copper Mines (KCM), Zambia's largest mine with over 11,000 workers, invested 400 million dollars to open up untapped copper ore deep underground, KCM vice president Austine Seyuba said.
The Konkola Deep Mining Project will be completed by 2009, he added.
"At the current copper prices, our annual turnover will be 750 million dollars after the completion of the project. This is the future of our country," Seyuba said. Copper production is expected to increase from 350,000 tons to 800,000 tons in the next three years, according to ministry of mines' projections.
------Mining investment
Another big mining investment is Lumwana Copper Project in northwestern Zambia where Australia's Equinox gave 300 million dollars for a new mine.
Lumwana, which will also produce gold, nickel and diamonds, is scheduled to open this month, producing about 140,000 tons of copper and creating some 2,500 jobs, according to Equinox.
Canadian mining firm First Quantum recently opened a 290-million-dollar mine under its Kansanshi Mining venture jointly owned by the Zambian government.
Zambia's unions however are cautious and warn that the investment flow may be short-lived.
"What will happen if the prices of copper collapses again?" asked Joyce Nonde, president of the Frederation of Free Trade Unions in Zambia.
"The investors will pull out and leave the workers languishing.
So we should not be over-excited," Nonde said.
The World Bank has been pushing the Zambian government to diversify the economy by focusing on tourism and agriculture.
tehrantimes.com
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