(Adds comments from Chamber of Mines, President)
By Nicholas Bariyo
Special to DOW JONES NEWSWIRES
Zambia's 2010 copper output is expected to hit 740,000 metric
tons up from 696,900 tons last year due to increased production at
several copper mines, the finance ministry said Monday.
Copper output is expected to keep rising due to the resumption
of operations at Luanshya Copper Mines as well as increasing
production at copper mines on the Copperbelt and North Western
provinces, Likolo Ndalamei, Zambia's secretary to the Treasury at
the Ministry of Finance said in a report.
Zambia is Africa's largest copper producer.
"With production expected to increase during the third quarter
of 2010 total production is now projected at 740,000 tons," he
stated.
Zambia's copper production in the first half of 2010 increased
by 10.2% to reach 363,682 tons compared with 330,125 tons produced
in the same period a year earlier, Ndalamei said.
He added that Zambia's copper mining sector continues to recover
positively from the effects of the global economic downturn. Rising
global copper prices since last year have induced mines to ramp up
production.
Luanshya Copper Mines, which had been closed in 2008 amid
dipping global copper prices has since been reopened following its
takeover by Chinese-owned NFC Africa, a unit of China Nonferrous
Metals Co. (8306.HK). The company announced in July that it intends
to invest at least $500 million to develop Chambishi South copper
mine on the Copperbelt province.
Fredrick Bantubonse, the director of Zambia's Chamber of Mines,
said the positive growth in the sector could be dented by the
continued implementation of the 2008 mining tax regime as well as
the abolition of mining development agreements.
"Future growth is dependent on the outcome of negotiations with
the government over the tax regime," he said, adding that the tax
regime had created fiscal regime uncertainty which is a threat to
future investments in expansion projects.
The Chamber of Mines, which represents mining companies, has
been in talks with the government since last year and wants the tax
regime scraped. The tax regime increased mine taxes and royalties
and introduced a 15% variable profit on mining companies.
Last week, President Rupiah Banda defended the tax regime saying
that it is transparent and an "effective" way of collecting mine
taxes to ensure that the Zambian people benefit from the country's
natural resources.
"The people of Zambia want reassurance that one of our richest
natural resources yields benefits which can assist with the
development of other sectors and the provision of vital social
services," he said.
"Mining is enjoying a period of steady growth and it is right
that the sector makes an appropriate contribution to revenues," he
added in an emailed statement to Dow Jones Newswires.
Zambia's copper production is expected to hit 1 million tons by
2011-12 when Konkola Copper Mines deep mine project comes on
stream. KCM is a unit of London-listed Vedanta Resources PLC
(VED.LN). Other mining companies operating in Zambia include
Toronto-listed First Quantum Minerals Ltd.(FM.T), Equinox Minerals
Ltd.(EQN.T), South Africa-based Metorex Ltd.(MTX.JO) and Swiss
commodity trader, Glencore International AG.
-By Nicholas Bariyo, contributing to Dow Jones Newswires;
256-75-2624615 bariyonic@yahoo.co.uk