STANDARD Chartered Bank says Zambia’s copper output this year is set to exceed the peak of 720,000 tonnes recorded in the 1960s when the country was the fourth largest world copper producer.
The production estimate is against 644,000 metric tonnes projected for last year.
Speaking during an economic forum in Lusaka, Standard Chartered Bank Africa regional head of research Razia Khan said Zambia has continued to register good growth in the last couple of years with mining in 2009 accounting for 21.4 percent, construction 15.5 percent and agriculture 7.1 percent of Gross Domestic Product.
Ms Khan said the commodity price boom on the international market has led to greater investment in Zambia’s mines.
She said the metal recovery on the international market will help generate wealth and create confidence.
“The price of copper is being supported by the Chinese economy and their demand for copper in auto production, property market, power equipment products and home appliances output,” she said.
Ms Khan said there are concerns about copper inventory levels in China and whether the price of copper would finish at around US$ 7,500 per tonne in 2010.
She said although Zambia is headed for a boom in the mining sector, there are structural bottlenecks that could affect growth, citing poor infrastructure like roads, railway and availability of power.
She said it is important to know whether the state of roads and railway system will sustain growth in copper.[quote]
“2010 outlook is good and mining sector need to think long term. There is need to take into account the fluctuation, productivity and look at contribution of mines into a more holistic manner,” she said.
Ms Khan said there is a strong view from the civil society to ensure that there is some payback from the mines.
“Zambia’s biggest problem is the large informal sector. There is need to widen the tax reform,” she said.
She noted that if Zambia could grow its economy at 6.3 percent during the global crisis period, there is potential for double digit growth, which needs holistic contribution from all sectors.
“Its not just what is happening to copper that matters but what is happening to the exchange rates which have an impact on trade. Zambia has had trade surplus since June and our analysis is that trade balancing will remain in surplus,” she said.
Ms Khan said the Bank of Zambia now has a healthy reserve position and its activity in the market will help in smoothing Kwacha volatility.
She also noted that maintaining single digit inflation would require hard work on the part of Government.
“If the labour unions continue to demand double digit figures, a wage growth of 20 percent will have inflationary pressure,” she said.
[Zambia Daily Mail]
Big deal.
By the way, 1st!
So what do we stand to gain from this peak in production?
This will depend entirely on the price of copper. Soon as it plunges, some mining companies will either scale down production or close shop.
So what? even if the prince of copper can go up to heaven high, the copperbelt will still not benefit.Just take a drive in Chingola where the biggest mine in Z is and you will be sorry of the state of the roads,This big mine have even refused to increase the salaries fo workers even when RB can just wake up and adjust the price of fule.(3% increment), as if we are bugggers
Good!! Now where is my check from all this wealth being bulldozed out of my country in the name of FDI? Yeah, I didn’t think so!!
Why is labour always the scapegoat for inflation? Quote: “If the labour unions continue to demand double digit figures, a wage growth of 20 percent will have inflationary pressure.” Please….., can poor Zambian Miners finally get their fair cut from all this wealth they are breaking their backs to generate? It is about time we valued labour just as much as we value our profits?
Why isn’t our govt bothered by this seemingly one-sided deal they got into with investors? Come on now, what is going on is an injustice tantamount to looting. When is Zambia and its people going to benefit from their God given Wealth for a change?
#3 this simply means more returns and more profits for investors in the first place, but also job security and a promising future for our mining industry.
u guyz are talkin abt 720000t whn kcm alone will produce 500,000+ tonnez of finished cu. and boosting zed economy hw???? whn a university in india which will have same standards as Harvedz is being constructed using our cu!!!! u r jokerz guyz!!!!!!!!!!!!!!!!!!!!
The foreigners have done it again! There are so many people who complain about where the money is going, but we had these copper mines from 1969 to 1999. The production progressively decreased from 700,000 tons to hardly 300,000 tons with Zambian managers and directors in control! Mr Francis Kaunda, Joseph Chileshe and Ed Shamutete run the ZCCM into the ground! Dr Kenneth Kaunda’s boys failed to run the mines and year after year they gave excuses as to why production was going down. Meanwhile these happy go lucky gentlemen continued to live as kings, buying challenger jets! Sorry, friend, I am all for Zambianisation but we failed.
The economy of the copperbelt province is thriving once again. This is the time for clever Zambians to begin to invest in parallel industries which support the mines so that as ‘suppliers’ and support services to these mines, they can make the money that will stay in the country. Honda, Toyota etc. have plants in the UK and while their profits go back to Japan, there are thousands of British jobs and ancillary industries that support the motor manufacturing industries. This is the new economic world order. So, Zambians, stop moaning and build schools, hospitals, recreation facilities etc for the miners and their families and move on to small part manufacturing, electronics and financial services etc and you will keep the money in Zambia!
That means it will be a good economy this year, a good economy means…more more in your pockets!
#10 the contracts for tenders are being shared amongest the corrupt politicianz and the foreign sister companies to the mines. 700 000? mama! copper ‘ba senda’, we have to get the most of our motherland minerals, windfall tax should be re introduced. Chile gets better benefit off their stone. dont forget that this stuff may run out, maybe not now, but eventually! we have to get the best out of it. poor Zambia!
She-One No# 8 dear lady I see your vision. Let Dambisa Moyo delicate some of her economics to our national economy. Like Esther or Ruth in the Bible she is a great human resource. There is always a churning in my tummy when an Indian or Arab soundng name talks about Zambian or African growth they always seem not to see us blossom I wonder why. The west at the least lives traces of community development because they love praise. China and our own people are a better economic partner because once you get the stubborn hard workers all is well.
big Moze
In 1986, the then Chairman and Chief Executive of ZCCM, Mr Kaunda announced that copper mining in Zambia would last just another 15 years ! It is now nearly 25 years and we are even producing more! What happened? Who were the Zambian Geologists who provided that data? Are there any people on this blog who were part and parcel of that era?
The Saint No# 14, someones child or relative to the geologists is part of this blog rest assured! The shall reveal themselves as the blog. Another Question, why do bloggers like Veteran, the Economist or cheif MMD bootlicker not share when a topic relates to Zambia being robbed of her natural jewels? Not being the sour grape though I respect democracy, but how hard is it to see that our own people blocked the growth of Zambia through Nepotistic positioning. Blocking Zambians from having a dream to be more than workers, to dream even about innovations; we had jets fairs but how many future scientists had their vision squashed when some inferiority complexed Zambian Told them to emulate bazungu ’cause they are greater? Irony is the greatest brain surgeon and Astro physicists in the world…
can the govt plan for that 750,000MT. all that copper will be carried on our roads which are not designed for such heavy loads. let govt sit down and see to it that the ordinary citizens can at least benefit even just a little bit from the countries wealth
are black, even the traffic lights some on this blog run at signal red were invented by a black man. Rock n’ roll the normal kind too. Remember ‘going surfing by the beach boys’ Chuck berry sued them and won because the took his song and altered the lyrics all plus the beat was the same. Education and science in all it’s forms was begun on the African continent; if I get a chance I shall pull that barbaric sellout Shaka Zulu from our childrens social studies and history books. Back to the future, we as Zambians must also start developing and not rely on grz they shall sell us short that is a gurantee that not even Mercedes can surpass.
#17 Mwanawakwitu
I hear you. May be we should look more at what we are contributing. Those who went before us, whther black or white did very well and set a foundation. But what we do ourselves matters.
Look at industries like those for cars, cameras, TVs etc. Quite a lot of them were started by Europeans and Americans as they advanced first. But the Japanese, Koreans have innovated those products in a way that the originators are no where to be seen now. E.g Top Electronic companies brands are from the East – Samsung LCD & LED TVs, Fridges, etc.
This shows we have an opportunity not onlt to invent but also to innovate. Look at Google, eBay, Yahoo. These modern icons were partly inverted by migrants to America.
Uk-Observer that’s the spark I am talking about. Imagine the building of a Zambian telecom by a few or one Zambian enterprenuer. Let me even go to basics more basic than we can even think. Agriculture, set up a consultant firm on agricultural inputs like seeds and technical knowhow between let’s say three commercial farmers and ten subsistence; small number here is the optimum. Even the investing in your young brothers, sisters and some relatives education is a must. For they even as braindrain hits shall send valuable resources back home, make it a point to train them about the social evils of the west too though. Ingrain them with God’s word and remind them that God offered his son and purged our entire sin catalogue forever. Plus he said work with your hands so don’t be lazy.
#10, THE SAINT:
I will bet, Honda and Toyota are paying their fair share of taxes to the British govt. But despite record profits are copper mines generating a comparable tax base for the Zambian govt to be able to build the schools & hospitals you are talking about? That’s the issue!!!!!
Why, on one hand does Zambia have to beg for budgetary support monies from foreign govts every year while on the other, stand-by and let all this wealth (in billions) go out of the country almost tax free? Even a tinny 2-3% windfall tax would generate billions for Zambia and in the process reduce the shameless kind of begging that’s going on.
Why haven’t foreign investors/companies in the West closed up and left when taxes in some of these countries are among the highest? I am sure they do provide good jobs to the locals, but at the same time they pay their fair share in taxes. And they are doing just fine, thank you. Nonetheless, when it comes to foreign investments in poor countries, familiar excuses are never far behind—-tax increases discourages FDI—-what a lie!!!
This clear case of double standards is robbing Zambia, and Africa as a whole, her rightful place on the ‘world economic map”—-plain and simple.
# 11 i will vote for you
People of Zambia! My mother in the civil service earning K800,000 ($160) is made to pay like any other regular citizen, taxes of about 40%. Now here is an industry making K30,000,000,000,000.($7,000,000,000) paying less than 3% of taxes. I wonder why the institution that is fundamentally purposed to run the Republic of Zambia for the people, will not consider optimum revenue options for the country:-? . After all the sums collected from the mining industry might even be more than those from the general population. My opinion