DUBLIN - (Business Wire) Research and Markets(http://www.researchandmarkets.com/research/19be3e/zambia_mining_repo) has announced the addition of the "Zambia Mining Report Q4 2009" report to their offering. This Zambia Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Zambia's mining industry.
Zambia enjoys a vast endowment of metals, gemstones, industrial minerals and potential energy resources including coal, hydrocarbons and, more recently, uranium. For several years now, Zambia's economy has been greatly dependent on mining, particularly copper, cobalt and zinc. Globally, the country ranks seventh in the production of copper and second in cobalt.
The major development for the Zambian mining industry over Q209 was the news that the government intends to increase its shareholding in foreign-owned mining companies from a current level of 10% to 35%. The move comes in the wake of many foreign miners choosing to close down unprofitable mines against the backdrop of global economic recession. However, it remains to be seen how foreign investors will react to this increased state presence in the mining sector, with the government giving no steer on how quickly it wishes to increase its mining stakes.
Copper and cobalt remain the lifeblood of the Zambian mining sector. Speaking in January 2009, Finance Minister Situmbeko Musokotwane said that preliminary copper production estimates indicated that copper output rose 3.7% in 2008 to 569,891 metric tonnes. Cobalt production rose 19.5% to 5,275 tonnes. Further, exploration of the Zambian Copperbelt area since the 1930s has led to the discovery of many other metalliferous and non-metalliferous resources. The Zambian state has adopted a mineral policy designed to augment investments in the mining sector and ensure its transition to a self-sustaining mineral-based industry. As part of this, state-owned mining companies have been actively privatised since the year 2000 - particularly in the copper segment. As a result of these efforts, Zambia is widely rated a low-risk investment destination and has attracted high levels of foreign investment in recent times. The government recently concluded drafting a revised mineral empowerment policy that aims to stimulate greater participation of Zambian nationals in their vast mining industry. The government also plans to develop large mining assets in all major provinces to create greater employment opportunities. This would address growing concerns about the uneven distribution of mining wealth. More recently, the government has reportedly been encouraging exploration for manganese in the north and north-west of the country and uranium in the south.
In June 2009, China Nonferrous Metal Mining Corporation (CNMC) pledged to invest US$400mn in Luanshya Copper Mines, following its formal takeover of the mining company. This new money should see the Baluba mine reopened and further development of the Mulyashi project, which could start to produce copper cathode during 2010. The reopening of the Baluba mine may see the re-employment of some of the 1,740 workers who were dismissed when the mine was placed under care and maintenance at the end of 2008. At the same time, Zambia has increased its own stake in Luanshya to 20%, as it seeks to increase its stake in the country's mining industry.
Windfall Tax Dropped At the end of January 2009, Zambia scrapped the windfall tax on minerals that was instituted in early 2008 following complaints from foreign miners operating within the country, and threats to delay projects and cut jobs amid difficulties in raising investment capital. The pressure from mining companies fighting the greater tax burden increased as commodity prices tumbled and talks shifted in the companies' favour. Indeed, the ongoing global economic crisis left Musokotwane with little choice but to drop the controversial 25% levy as the country sought to protect its copper industry. At the same time, the minister also cut duty on heavy fuel oil from 30% to 15%, and removed customs duty on various copper products. In September 2009, President Rupiah Banda defended the scrapping of the windfall tax in his annual state of the nation address to parliament. Quoted by Reuters, Banda rejected claims that the country will lose revenue as a result, as another 15% variable profit tax rate remains in place. Banda also stated that his government intends to promote investments in the small-scale mining and marketing of gemstones, which he hopes will both broaden the tax base and create new jobs, according to the Reuters report.
Industry Forecast Zambia's mining sector was severely affected by the lower price of copper over the first half of the year. However, news that Luanshya Copper Mines has been successfully sold to a Chinese concern and that the Chambishi Metals cobalt smelter is soon to recommence production will act as support for the sector from now on.
According to the author's forecasts, the mining industry in Zambia is forecast to grow at an average rate of 10% during 2008-2013. The industry is expected to reach a value of ZMK2.232bn (US$0.53bn) in 2013. However, although the long-term prospects are good in 2009, the sector is expected to contract significantly in real terms over the course of the current year.
Key Topics Covered:
- Executive Summary
- SWOT Analysis
- Special Focus: Outlook For Global Mining
- Industry Trends And Developments
- Business Environment
- Industry Forecast Scenario
- Competitive Landscape
- Appendices
Companies Mentioned:
- First Quantum Minerals
- Lithic Metals and Energy
For more information visit http://www.researchandmarkets.com/research/19be3e/zambia_mining_repo
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