[miningmx.com] — THE high copper price will bring further hefty investment into the sector in Zambia next year, keeping it on track to produce an annual one million tonnes by 2012, the head of the body representing foreign miners said.
Chamber of Mines of Zambia president Nathan Chishimba said the trend seen in 2010, when Zambia attracted $2bn in new mining investments, would continue and would further benefit from stable tax policies in the southern African country.
“I think the prospects for mining in Zambia… are very, very bright,” Chishimba told Reuters in an interview on Wednesday.
“A high copper price … permits flexibility by investors to plough back into improvements in production, improvements in efficiency and overall improvement in output.
“We believe these new projects, once they stabilise, will go a very long way towards achieving the one million tonne mark which we have set for ourselves in the next two years or so,” he said.
London Metal Exchange copper rose to a record high of $9,447 a tonne on Wednesday when trade resumed after the Christmas break, during which US futures rallied to a top fuelled by a weaker dollar and worries about supply from Chile.
Metals prices are expected to follow their own fundamentals during 2011, as emerging market economies drive ahead and demand recovers in developed nations, pushing copper above $11,000 a tonne, Goldman Sachs forecast this month.
Chishimba said the investment of $400m into a Zambian copper project by Brazil’s Vale, the world’s top iron ore miner, was a vote of confidence in Zambia’s mining sector, which is the largest copper producer in Africa.
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.
Chishimba said “shifting of goal posts and knee-jerk reactions” via policy changes without exhaustive consultation of industry players could pose a risk to the sector and he welcomed the stability in policies, which he said reassured investors.
Chishimba said it had taken $5bn in investment over the last decade for Zambia to get back to annual copper output of more than 720,000 tonnes, and the country should strive to exceed that by attracting further investment.
Zambia should also bring down the cost of doing business and invest in energy and infrastructure projects to support the growing mining industry, he said.
Other mining companies operating in Zambia include Vedanta Resources Plc, Equinox Minerals, Glencore International AG and Metorex.
