Post date: Dec 29, 2010 4:16:38 PM
It's an exciting time for Zambia's mining industry as investment in the sector is going from strength to strength according to the country's Chamber of Mines.
MAZABUKA, ZAMBIA . REUTERS - It was only nine months ago that Zambia's president Rupiah Banda was officially pushing the button on the Chinese-owned Munali nickel mine.
And the mining industry has continued to do so well since then, that Zambia's Chamber of Mines, representing foreign miners operating in Africa 's largest copper producer, sees a bright long-term future for the industry, its president said on Tuesday (December 28).Chamber of Mines of Zambia president Nathan Chishimba told Reuters the country attracted 2 billion US dollars worth of mining investment in 2010 and similar inflows were expected in 2011.
Chishimba said the investment of 400 million US dollars into a Zambian copper project by Brazil 's Vale, the world's top iron ore miner, was an important vote of confidence in Zambia 's mining sector.
"The mining sector in Zambia experienced quiet a favourable period in 2010. We expect this to continue in 2011 especially if the commodity prices continue showing the trends that they are showing now. That will allow companies a lot of scope to invest in production capacity and also in efficiency improvements in the existing productions so a high copper price is very good because it permits flexibility by investors to plough back into improvements in production, improvements in efficiency and overall improvement in a, in output," Chishimba told Reuters in an interview in the country's capital Lusaka.
Metals prices will diverge to follow their own fundamentals during 2011 as emerging market economies drive ahead and demand recovers in developed nations, pushing copper above 11,000 US dollars, Goldman Sachs forecast this month.
Chishimba said with high commodity prices, Zambia was likely to attract a lot of investment which would help the country meet its target of producing 1 million tonnes of copper by 2012.
He said Zambia could raise its copper production beyond 2 million tonnes if the government adopted and implemented the right long-term policies.
"What we have done so far is a mere start so we need to go forward, we need to maintain the same commitment both from the policy level, from the private investor level to ensure that we build this steady growth we go up to 2 thousand, I mean 2 million, 1.6 million then we will be talking about trying to explore our full potential and we should not leave the other minerals behind as well, the albidons (nickel mine) we are talking about, the manganese we are talking about, the iron ore deposits we are talking about, all those should come into play and make us a major mining province," Chishimba said.
In order to continue attracting investment, Zambia needed stable long-term policies to show mining investors that it recognised the magnitute of the risks that they took, he said.
Finance minister Situmbeko Musokotwane said in November the government had agreed to maintain the existing mining taxes for 10 years to provide stability to mining investors.