Copper mining is making the headlines again as it has done in the past when copper prices begin to rise.
For many Zambians, the current copper prices that have risen from a low of USD3,000 per tone and now stand at about USD4,000 per tonne is good news and there is hope that the prices will continue to improve.
All eyes are on China, the world’s largest buyer of copper, to see how the manufacturing economy is doing out there. Any increase in China’s manufacturing sector in areas using electrical and electronic products, will result in more copper being purchased and logically, the price of copper should increase due to the increased demand.
On the home front, ZCCM IH is looking to invest in African Copper (ACU) to the tune of USD22.5 million in a bid to pull ACU out of its present financial crisis and take advantage of a stake in a copper mining operation in view of the rising copper prices.
In Luanshya, there is growing excitement about the prospects of new investors in the mining operation there. Front runners for the Luanshya mines are a Chinese investor and several other un-named options.
As investors are poised to take over mining operations in the country, the Mine Workers Union of Zambia (MUZ) have voiced their concerns about allowing old investors that had previously operated mines in Zambia, and later pulled out due to the low copper prices, to come back now when the going seems to be getting better. This position has also been echoed by the State President Rupiah Banda who was not happy with former investors that abandoned the country and their employees when business got tough, and were now rushing in to pick up where they left off.
In the wings, we note that Lumwana Mining Company has experienced differences with Mopani Copper Mines and Glencore International in respect to the specifications of copper concentrates for processing at the Mufulira Smelter. An alternate arrangement has now been made with the Chambishi Copper Smelter for Lumwana concentrates to be processed, but Zambia is likely to eventually pay the price of building another Smelter plant as a consequence of these differences.
There is a great opportunity for the copper mining industry to collaborate where it makes sense, and to compete in areas of productivity and technologies. The duplication of Smelting plants that have capacity to process concentrates for several mining companies, is not only a waste of money for the mining companies themselves, but a waste of resources for Zambia as a whole.
Copper prices may be on the increase, but the world is increasingly competitive, and efficient, cost effective production will go a long way towards sustainable business. To this end, collaboration and cost sharing in the mining industry will benefit all investors in the long run.
Government and the Zambia Development Agency can also play a significant role in promoting, facilitating, and supporting value addition to copper within the country. The Chambishi economic zone can be targeted as the primary vehicle for developing the value chain in the copper industry. Zambia needs to see more investments such as ZAMEFA on the Copperbelt. Opportunities are there to manufacture copper cables of all sizes and description in the Chambishi economic zone and elsewhere on the Copperbelt. Many other copper based products are possible with guided investment incentives offered by ZDA.
The copper slump will go, and no doubt return after a few years. Zambia must make some decisive choices about how to tackle the rising and falling prices of copper on the world market. We can choose to go with the flow and be subject to the price variations out there, or we can decide that we will consciously invest in the value addition components of the industry, so that the changes in metal prices have as little impact as possible on our own domestic economy.
The impact of value addition in the copper industry has implications far beyond the copper industry. Copper metal fabrication and processing has the effect of creating capacity to add value to other metals such as zinc, aluminium, etc. This metal processing sector can quickly become the basis for many different forms of manufacturing across the country.
This phenomenon is evident as we currently experience the development of a steel industry in Zambia. There are several steel processing plants in operation, and several more being developed by the private sector. The impact is already being felt in the manufacturing sector as new companies are being set up to manufacture steel based products such as door frames, window frames, steel re-enforcement building products, trailers, machinery, and farming implements that were previously imported.
Reports indicate that China is stock piling copper to support its industry which is the backbone of the expected 8.3 percent growth of the economy in 2009. Although the USA, Japan, and Europe are reducing their imports of copper and other metals, China is taking up the overspill and using the opportunity to boost its own economy.
On the home front, European companies are now offering franchises to Zambian companies to procure equipment and machinery for metal processing, in an effort to market their technologies in Zambia. The net effect of these initiatives is that Zambia can become more industrialized, Zambians can gain better skills with new technologies, and Zambia can transform her economy from a primary raw material producer, to a sustainable manufacturer of semi processed and processed metal products.
For many Zambians, the current copper prices that have risen from a low of USD3,000 per tone and now stand at about USD4,000 per tonne is good news and there is hope that the prices will continue to improve.
All eyes are on China, the world’s largest buyer of copper, to see how the manufacturing economy is doing out there. Any increase in China’s manufacturing sector in areas using electrical and electronic products, will result in more copper being purchased and logically, the price of copper should increase due to the increased demand.
On the home front, ZCCM IH is looking to invest in African Copper (ACU) to the tune of USD22.5 million in a bid to pull ACU out of its present financial crisis and take advantage of a stake in a copper mining operation in view of the rising copper prices.
In Luanshya, there is growing excitement about the prospects of new investors in the mining operation there. Front runners for the Luanshya mines are a Chinese investor and several other un-named options.
As investors are poised to take over mining operations in the country, the Mine Workers Union of Zambia (MUZ) have voiced their concerns about allowing old investors that had previously operated mines in Zambia, and later pulled out due to the low copper prices, to come back now when the going seems to be getting better. This position has also been echoed by the State President Rupiah Banda who was not happy with former investors that abandoned the country and their employees when business got tough, and were now rushing in to pick up where they left off.
In the wings, we note that Lumwana Mining Company has experienced differences with Mopani Copper Mines and Glencore International in respect to the specifications of copper concentrates for processing at the Mufulira Smelter. An alternate arrangement has now been made with the Chambishi Copper Smelter for Lumwana concentrates to be processed, but Zambia is likely to eventually pay the price of building another Smelter plant as a consequence of these differences.
There is a great opportunity for the copper mining industry to collaborate where it makes sense, and to compete in areas of productivity and technologies. The duplication of Smelting plants that have capacity to process concentrates for several mining companies, is not only a waste of money for the mining companies themselves, but a waste of resources for Zambia as a whole.
Copper prices may be on the increase, but the world is increasingly competitive, and efficient, cost effective production will go a long way towards sustainable business. To this end, collaboration and cost sharing in the mining industry will benefit all investors in the long run.
Government and the Zambia Development Agency can also play a significant role in promoting, facilitating, and supporting value addition to copper within the country. The Chambishi economic zone can be targeted as the primary vehicle for developing the value chain in the copper industry. Zambia needs to see more investments such as ZAMEFA on the Copperbelt. Opportunities are there to manufacture copper cables of all sizes and description in the Chambishi economic zone and elsewhere on the Copperbelt. Many other copper based products are possible with guided investment incentives offered by ZDA.
The copper slump will go, and no doubt return after a few years. Zambia must make some decisive choices about how to tackle the rising and falling prices of copper on the world market. We can choose to go with the flow and be subject to the price variations out there, or we can decide that we will consciously invest in the value addition components of the industry, so that the changes in metal prices have as little impact as possible on our own domestic economy.
The impact of value addition in the copper industry has implications far beyond the copper industry. Copper metal fabrication and processing has the effect of creating capacity to add value to other metals such as zinc, aluminium, etc. This metal processing sector can quickly become the basis for many different forms of manufacturing across the country.
This phenomenon is evident as we currently experience the development of a steel industry in Zambia. There are several steel processing plants in operation, and several more being developed by the private sector. The impact is already being felt in the manufacturing sector as new companies are being set up to manufacture steel based products such as door frames, window frames, steel re-enforcement building products, trailers, machinery, and farming implements that were previously imported.
Reports indicate that China is stock piling copper to support its industry which is the backbone of the expected 8.3 percent growth of the economy in 2009. Although the USA, Japan, and Europe are reducing their imports of copper and other metals, China is taking up the overspill and using the opportunity to boost its own economy.
On the home front, European companies are now offering franchises to Zambian companies to procure equipment and machinery for metal processing, in an effort to market their technologies in Zambia. The net effect of these initiatives is that Zambia can become more industrialized, Zambians can gain better skills with new technologies, and Zambia can transform her economy from a primary raw material producer, to a sustainable manufacturer of semi processed and processed metal products.
Published on 5 May, 2009
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