A brighter outlook for Zambia’s copper sector
Rising copper prices, a favourable mining tax regime and stable electricity supply are driving a return of confidence in Zambia’s beleaguered copper sector
Indian mining company Vedanta Resources announced plans last month to invest US$1bn in its Zambian unit, Konkola Copper Mines (KCM), creating 7,000 jobs. This followed plans unveiled in February by Canadian-owned First Quantum Minerals (FQM) to invest an equal amount in its operations in the northwestern part of the country, nearly three years after first postponing the capital investment. Higher copper prices are behind the surge of confidence in Zambia’s mining sector. The international price of copper hovered at about $6,000/t in March, after almost three years of levels closer to $4,000/t. During that time, a number of companies were forced to downscale their investments, while others placed mines in "care and maintenance". Confidence in the sector has also been boosted by government’s about-turn both on taxes — tax hikes for copper miners were abandoned last year — and on its plans to withhold more than $500m in Vat refunds owed to mining companies. In 2014, government withheld...
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