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(LUSAKATIMES) Zambia’s Copper production to reach 720 000 tonnes in 2010

Zambia: Zambia’s Copper production to reach 720 000 tonnes in 2010

STANDARD Chartered Bank says Zambia’s copper output this year is set to exceed the peak of 720,000 tonnes recorded in the 1960s when the country was the fourth largest world copper producer. The production estimate is against 644,000 metric tonnes projected for last year.

Speaking during an economic forum in Lusaka, Standard Chartered Bank Africa regional head of research Razia Khan said Zambia has continued to register good growth in the last couple of years with mining in 2009 accounting for 21.4 percent, construction 15.5 percent and agriculture 7.1 percent of Gross Domestic Product.

Ms Khan said the commodity price boom on the international market has led to greater investment in Zambia’s mines.

She said the metal recovery on the international market will help generate wealth and create confidence.

“The price of copper is being supported by the Chinese economy and their demand for copper in auto production, property market, power equipment products and home appliances output,” she said.

Ms Khan said there are concerns about copper inventory levels in China and whether the price of copper would finish at around US$ 7,500 per tonne in 2010.

She said although Zambia is headed for a boom in the mining sector, there are structural bottlenecks that could affect growth, citing poor infrastructure like roads, railway and availability of power.

She said it is important to know whether the state of roads and railway system will sustain growth in copper.

“The price of copper is being supported by the Chinese economy and their demand for copper in auto production, property market, power equipment products and home appliances output,” she said.
“2010 outlook is good and mining sector need to think long term. There is need to take into account the fluctuation, productivity and look at contribution of mines into a more holistic manner,” she said.

Ms Khan said there is a strong view from the civil society to ensure that there is some payback from the mines.

“Zambia’s biggest problem is the large informal sector. There is need to widen the tax reform,” she said.

She noted that if Zambia could grow its economy at 6.3 percent during the global crisis period, there is potential for double digit growth, which needs holistic contribution from all sectors.

“Its not just what is happening to copper that matters but what is happening to the exchange rates which have an impact on trade. Zambia has had trade surplus since June and our analysis is that trade balancing will remain in surplus,” she said.

Ms Khan said the Bank of Zambia now has a healthy reserve position and its activity in the market will help in smoothing Kwacha volatility.

She also noted that maintaining single digit inflation would require hard work on the part of Government.

“If the labour unions continue to demand double digit figures, a wage growth of 20 percent will have inflationary pressure,” she said.

[Zambia Daily Mail]

Labels: COPPER

posted by MrK @ 7:42 PM