[miningmx.com] — RECOVERING copper prices will boost Zambia’s economy, Imara Africa Securities said on Monday.
Zambia, which is Africa’s largest copper producer, was severely affected by the dip in commodity prices brought on by dwindling demand for commodities amid the global economic recession.
Imara Africa Securities said approximately 60% of Zambia’s workforce is linked to the copper mining industry and that it was in that sector where many jobs were lost during the peak of the recession.
The Zambian currency, the kwacha, is said to have responded positively to news that copper prices had improved and was expected to make further gains.
“Investments that were hither to put on hold are back on the go, with copper output now expected to increase to 750 000 tonnes in 2010 and 1 million tonnes by 2012, from 700 000 tonnes in 2009,” said Imara Africa Securities.
Copper production in that country reportedly rose 16% to 321 132 tonnes in the first five months of 2010 boosted by rising global metals prices.
Imara Africa Securities expects the turnaround in the mining sector to filter through to the rest of the economy, given the role copper plays as a key driver of economic performance, it said.
“This should in turn filter through to financial performances of counters listed on the LuSE, with the mining, banks and consumer driven companies in particular expected to benefit,” it concluded.
