Zambia Seeking to Gain from Booming Mining Sector

[bingogo]

Published on January 19, 2012 at 7:55 PM

By Joel Scanlon
Zambia is looking to realise greater profits from its mining industry. The Mines Minister Wilbur Simuusa was speaking to mine supplier and contractors at the Chingola mine club when he said that in terms of mineral resources they were the richest nation and yet they were counted amongst the poorest nations in the world.

The new Zambian president Michael Sata has introduced populist policies to ensure that the state has better control over the booming mining sector in the nation.The state run mining company called Zambia Consolidated Copper Mines Investments Holdings is to get a larger role in the mining sector soon.

The state run mining company is to get a higher stake in existing copper mines from the current 10 to 15% to nearly 35%. The Mines Minister Wilbur Simuusa also said the company would be also acquiring two new green field projects. These are new mining projects that are likely to be located outside the copper belt province in Zambia.

Small scale miners are also going to be encouraged as per the Mines Minister Wilbur Simuusa as a new fund is being set up for the mining sector. This fund will aim at providing loans to local junior miners. The minister said that the country had learnt from the Mining Sector Diversification Programme revolving fund that the European Union had dished out and would not be making the same mistakes.

The mining minster also said that there was a need to reorganize the gemstone industry. The poor export monitoring system was costing the government a lot of revenue said Simuusa. Last year the gemstone industry declared revenue of merely $2 million while the world market declared that nearly $700 million worth of gemstones were bought from Zambia.

[bingogo]

Friday, 20 Jan 2012


Mines minister Mr Wylbur Simuusa said that Zambia plans to double the contribution of the mining sector to its gross domestic product to 20% to enable the country to get more benefits from its main natural resource.

Copper mining is Zambia's economic lifeblood and a key employer in the southern African country of 13 million people. According to government data from the central statistical office, Switzerland imports the bulk of the country's copper followed by China.
At a meeting called to review the law governing mining, Mr Simuusa said the sector currently contributed between 9% and 10%to GDP. He said that "If we can double what we are getting, then we can say we have at least done something without giving a time frame.”

He said the government would like State owned Zambia Consolidated Copper Mines Investment Holdings which currently represents the state in mining ventures through equity stakes, to actively participate in the industry by running and owning some mines.

He said that government would also revamp small scale mining for it to contribute more to the economy, and would change mining laws to give the government a bigger supervisory role.

Mr Simuusa further said that "We are also diversifying into less traditional mining areas instead of just concentrating on copper.”

Foreign mining firms in Zambia include Brazil's Vale, Canada's First Quantum Minerals and Barrick Gold and London listed Vedanta Resources and commodity giant Glencore.

He added that studies by the World Bank and the International Monetary Fund had shown that Zambia was not getting the due benefits from mining. He further said that "In terms of taxation, mining is contributing only 3% against exports of 60% to 70%, and we are saying that should be changed.”