The international price of copper has fallen and Zambia’s copper-dependent economy is at a breaking point. In the 1980s, the country produced about 750,000 metric tonnes of finished copper every year until the 1990s when output dropped to 200,000 metric tonnes. Production picked up in 2000 but has been recently limited in the dawn of the current economic depression.
Mr. Rupiah Banda the president of Zambia recently announced that his government would take over mines facing operational difficulties, but has insisted that mines would not be nationalized, unless the private sectors failed to hold unto their operations.
Nationalization of the mines may become necessary as firms like Konkola Copper Mines (KCM), this week laid-off 700 of its workforce of 15,000 after shutting down its smelting plant and Mopani Copper Mines have announced that it would sack up to 1,000 of its 16,000 employees by the end of February 2009, and the country’s biggest mine.
This sad development for the Zambia economy has seen labor forces cut down, mining operations shut down and plans for projects put on hold. Poverty is said to begin to bite in Zambia’s Copperbelt Province. It is reported that the Bwana Mukubwa and Luanshya Copper mines now have only maintenance staff.
The management of Luanshya have also closed down their Chambishi copper smelter and suspended their $355 million Mulyashi mine project. Luanshya Copper Mine.
In December 2008, a joint venture of the Swiss-based International Mineral Resources and Bein Stein Group Resources of Israel, closed its operation resulting in 1,700 retrenchments. Many laid-off miners have turned to informal trading to make ends meet.
Finished copper is a valuable component in electrical and electronics, and in building industries and Zambia is the world largest producer of the valuable metal. However, the world economic recession has seen the demand for copper drop and thus its international value fall from a record high of about $8,000mt between 2005 and 2007 to about $3,000mt.
The country had hoped to increase productions to 100 000 metric tonnes by 2009 but that has been considered as unachievable following the global economic meltdown.