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By Champo Muyembe.

The news of the improved Copper prices has been welcomed by all copper producers and more so by Zambians.

Recently, depressed prices of copper had reached levels that threatened the viability of all, but a few.

Copper producers have been fighting to survive by reducing their costs.

And this had resulted in management’s rationalization to help round off cost cuttings.

Copper is a predicator of the stock markets and the economic strength, continual strength in the copper markets at the moment indicates that the markets have more upside potential.

The higher the copper trades, the stronger the overall market becomes.

The copper stockpiling by the Chinese has helped trigger a mountable rally in the price of the commodity this year. The metals fortunes are closely linked to the industrial cycle of Zambia’s economy and so the price jump, one that is bigger than that of gold, has grabbed the attention outside the commodities market, with others questioning whether this could signal a turning point for economic growth both in Zambia and other copper producing Countries.

Developments in China which have accounted for almost a third of global copper consumption last year still remain cardinal to the market’s prospects. Reports point to buying by Beijing’s state Reserves Bureau, which manages the country’s strategic stockpiles. Traders estimate that the Chinese are in the process of securing 300, 000 tonnes of copper and speculate that it could buy up to 1.2 million tonnes before the end of this year. Some experts have noted that real demand has played little part in the current copper price up and remains notably weak as global manufacturing activity continues to decline.

With this in mind, the Government of Zambia should try to use every opportunity available to ensure that the mining sector is safeguarded from imminent closures and job cuts, other than anything more that the sector has already experienced that could seriously put the country’s credibility into question.

Copper prices are regarded by a number of investors as a highly accurate, very lucrative, and proxy on the health, or otherwise of the world economy. Therefore, we hope that the improved copper prices on the international market will be sustained and supported by the demand for the commodity by China.

As the country’s major export earner, copper has played a very significant role in shaping Zambia’s economy for many years. The mining industry contributes a major proportion of Zambia’s gross domestic product (GDP) and accounts for thousands of jobs especially on the Copperbelt. A few months back, mining companies had started downsizing their operations owing to the fall in copper prices, a move that saw thousands of Zambians losing their jobs.

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By ZamChro Correspondent

Luanshya Copper Mine (LCM) yesterday commenced trial copper mining after undertaking rock blasting at Baluba, company deputy chief executive officer Gao Xiang has said.

Speaking in an interview, Mr Goa said commencement of the trial copper production marked the beginning of copper mining activities at the mine.

“As the mine’s managers we are happy that all the preparations for the commencement of production and the blasting which started today (Tuesday) is going on smoothly as scheduled,” Mr Gao said.

Mr Goa said LCM was expected to start producing 1,000 tonnes of copper per month approximately 11,000 tonnes per year before increasing to 2,000 tonnes per month.

He said the company was aiming at increasing the production levels to 5,000 tonnes per month totalling 60, 000 tonnes per annum after 2011.

The number of employees at the mine is also expected to increase from the current 2,250 once the mine increases production.

LCM was closed early this year and placed on care and maintenance after global commodity prices fell on the international market.

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By ZamChro Correspondent

Equinox Minerals, the owners of Lumwana Mine in Solwezi, president and chief executive officer Craig Williams has said his company has continued to assess the possibility of expanding mining operations beyond the current mine.

He said there were significant opportunities at the Lumwana Mine following the completion of ramp up to further expand and optimise the concentrator and mine current production rate. 

Mr Williams said on Friday, when presenting the company’s financial and operational results for the third quarter,  that the mine management had continued to assess and evaluate the additional near mine deposits discovered to date.

“Equinox will continue to assess these opportunities for expansion and organic growth at the Lumwana Mine,” he said.

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By ZamChro Correspondent

Chambeshi Metals, which was closed early this year will resume operations this week and immediately re-employ at least 300 workers, chief executive officer Derek Webbstock has said.

Mr Webbstock said on Tuesday that the copper and cobalt processing plant had received enough raw materials for it to resume partial operations.

He said the plant would start processing cobalt concentrates this week after accumulating sufficient stocks at the plant.

“We have received enough cobalt concentrates from the Democratic Republic of Congo (DRC) so we should resume operations this week,” he said.

Mr Webbstock could not however reveal the quantity of the concentrates but insisted that that the amounts were sufficient to sustain commencement of production.

He said the company would soon start processing copper concentrates as well depending on the availability of supply from mining companies.

Mr Webbstock did not give a time frame on the commencement of processing copper concentrates, saying the company would look at availability of supply of the concentrates.

He said apart from expecting copper concentrates from the DRC, the company would also see how production at Luanshya Mine goes and whether the mine would be willing to enter into a contract to supply concentrates.

“We initially expect about 300 workers to resume working and more will probably be engaged as production increases,” he said.

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By ZamChro Correspondent

Caritas Zambia economic justice programme officer Edmond Kangamungazi last week urged Government to increase revenue and tax transparency from the mines.

Mr Kangamungazi said this in Lusaka when he made a presentation at a one-day conference on “Exploiting Our Natural Resources”.

He said there was need to increase tax and royalty rates charged on sales value and mining profits where these are too low.

He said last year Government projected an estimated revenue of K502.1 billion under windfall tax but only K126.1 billion was collected, registering a deficit of K376 billion.

He said company tax projected to be collected was K300.5 billion but only K22 billion was collected.

Mr Kangamungazi said mining taxes are important because mineral extraction was not found in all towns.
He said, therefore, that tax revenue spent through the budget or other mechanisms is a key benefit of mining to mineral rich societies and economies.

“Mining is always a cost to the environment and surrounding communities. Communities and ecosystems around mining activity face enormous risks. The tax regime should assist Government to help compensate and safeguard communities and the environment around mining areas, ’’ he said.

Mr Kangamungazi said mining companies cannot provide communities with the basic services to which they are entitled in an efficient or equitable way.

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By ZamChro Correspondent

Sandulula Mining, a Zambian Mining Company, and Tranter Holdings of South Africa are next month expected to start exploring for copper in Mporokoso.

Lunte member of Parliament, Felix Mutati, said this in response to a query from Chief Mukupa Kaoma who wanted to know the latest on the exploration of minerals in his chiefdom.

Mr Mutati, who is Minister of Commerce, Trade and Industry, said machinery for exploration of minerals in Lunte Constituency is already in the country.

Chief Mukupa kaoma said his chiefdom is rich in minerals, adding that mining activities will create employment for the local people.

“Instead of migrating to other places in search of greener pasture, our people will remain in the area because there will be employment available locally,” he said.

Mr Mutati said he has allocated land for jatropha cultivation to a Chinese company that has expressed interest in setting up a farm in the area.

Chief Mukupa kaoma said Government should promote foreign direct investment in rural areas to accelerate development.

Sandulula Mining and Tranter Holdings recently signed an agreement to carry out mineral explorations in Mporokoso.

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By ZamChro Correspondent

Mines Minister, Maxwell Mwale has said Zambia stands to gain more from increased long-term foreign direct investment (FDI) in the mining sector than the short-term tax revenue losses arising from the abolishment of windfall tax, Mr Mwale said in an interview in Lusaka yesterday that the Government decided to scrap the tax after realising that it was discouraging the much-needed investment in the mining sector.

The windfall tax was intended to match increases in the prices of copper and was set at 25 per cent while copper sold at US$2.50 per pound, 50 per cent for the next 50 cents and 75 per cent when the price of copper fetched more than $3.50 per pound.

The price of copper is currently around $6,100 per tonne, or $2.70 per pound, and could have attracted the windfall tax had it not been scrapped.

Mr Mwale said some people were already condemning the removal of the tax but the Government wanted to be consistent and had no intention of re-introducing it.

“What good is it if you have something on your statutes which discourages investment? We are better off encouraging foreign direct investment into Zambia,” Mr Mwale said.

“The removal of windfall tax was meant to encourage would-be investors because the windfall tax was seen as a disincentive to any investor,” the minister added.

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By ZamChro Correspondent

Lumwana Mining Company (LMC) managing director, Harry Michael told a Parliamentary Committee on Government Assurances that visited his mine on Saturday in Solwezi that the company, in a bid to maximise safety, has a policy of instant dismissal for those found wanting. He said his company has dismissed 180 workers since inception due to alleged alcohol abuse while on duty.

“A hundred and eighty people have been fired for failing alcohol tests or racist behaviour and 95 per cent of these are expatriates,” Mr Michael said.

Mr Michael said his company had taken the hard path of zero tolerance to alcohol, drug abuse and racism because the company was interested in development and safety of workers.

“We have US$588 million of shareholders’ money and another US$664 million from bank debts to safeguard and so we cannot afford to relax on rules regarding safety and the lives of our people,” he stated.

Mr Michael said the company had put stringent safety measures not only to safeguard the lives of its workers but its huge investment as well.

“So many expatriates here have had to go back to their countries for failing to follow the safety standards or merely a breathalyser test,” he revealed.

Mr Michael said his company, which employs people from 40 different nations, is a cornerstone investment in the development of Zambia.

“We have contributed K360 billion of taxes to ZRA and have spent another K57.8 billion in the last 12 months on 160 local companies,” he said.

He called upon Government to remain consistent with its policies if the Lumwana investment was to succeed.

“All of our assets and eggs are here in Zambia and hence our request for certainty in terms of policies and taxes,” he said.

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By ZamChro Correspondent

Government has not issued any uranium mining licences but prospecting permits to three mining companies.

Minister of Mines and Minerals Development Maxwell Mwale, however, said that OmegaCorp Minerals Limited is likely to apply for a uranium mining licence after submitting an environmental impact assessment (EIA) to the Environmental Council of Zambia (ECZ).

Mr Mwale said in an interview last week that Government had only processed three prospecting licences.

He, however, could not disclose the names of prospecting companies issued with permits.
“We have not yet given out any mining licences… but Denison (parent company of OmegaCorp) may consider applying for a mining licence because they are at a stage where they have just submitted an EIA to the ECZ,” he said.

OmegaCorp Minerals Limited held an environmental and social impact assessment public consultation at the Mutanga exploration camp in Siavonga recently.
The firm is planning to mine uranium ore by open pit method from Mutanga and Dibwe deposits.

The deposits are located about 40 kilometres north-west of Siavonga in Southern Province.
OmegaCorp is a wholly-owned Zambian subsidiary of Denison of the USA, which is listed on the Toronto and the American stock exchanges.

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By ZamChro Correspondent

Mine Workers Union of Zambia (MUZ) president Rayford Mbulu has asked mine owners in Zambia to consider re-employing skilled miners retrenched following the slump in copper prices, now that the price has gone up.

“The decision to retrench miners was done in a hasty manner; mine operators are making more money, the decision that was taken (retrench workers) was not justifiable,” he said.

Mbulu said it was relevant that mine operators should improve things since the price of copper had improved on the international market.

“A lot of miners have been thrown on the streets, mine operators should rescind their decision, they should re-employ the workers who were retrenched, especially those with skills,” he said.

“It only took two months after the financial recession for them to start retrenching the workers. There have been some significant improvement from November last year. Now the price of copper is about US $6,150 per tonne, this justifies our cry. These people have already made up for their losses.”

Mbulu also said it was unfortunate that the government scrapped the windfall tax when the price of copper went down.

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