Wednesday, September 17, 2008

Zambia's H1 copper output up 20% - central bank

Zambia's copper output for the six months to June 2008 rose by 20 percent to 286 750 tonnes versus the same period last year, the southern African country's central bank said on Tuesday.

Central Bank deputy governor Denny Kalyalya told Reuters that Africa's top copper producer was on course to achieving the 600 000 tonnes annual output projected in 2008.

However, he said there could be some production challenges in the event of heavy rains expected to start in early November.

"If there is no big interruption, that figure is achievable or even a much higher production compared to last year. We have high hopes that some mines will ramp up production," Kalyalya told Reuters.

"Current production and export figures show that we are moving in the right direction and they are a catalyst for more production in the future," Kalyalya said.

The bank also said cobalt production rose 2 percent to 2 230 tonnes in the first half from last year's 2 188 tonnes.

Zambia's copper production in 2007 was 535 000 tonnes.

The Central Bank said copper exports increased to 283 968 tonnes from 229 545 tonnes. Exports of cobalt were 2 253 tonnes compared with 2 139 tonnes in the period January to June 2007.

Kalyalya said new projects expected to come on stream would shore up copper and cobalt production, create more employment in mining and earn the country additional foreign exchange.

"This will be positive in terms of overall economic growth and what we need now is more processing of copper so that not all the raw copper is exported and the linkages between mining and mineral processing will add more revenue to the government," Kalyalya said.

The copper mines are Zambia's major employer and earns the country the bulk of its foreign exchange.

Zambia forecasts that copper production will peak at 1,0-million tones by 2010 after new mines commence production.

Kalyalya said the central bank would continue to help the government to sustain a stable macroeconomic environment by ensuring inflationary pressures are reduced and the kwacha currency is stabilized to sustain copper and cobalt production and encourage further investments.

"We will continue to deal with issues of macroeconomic stability and market volatility to encourage (investors) to bring in more forex (foreign exchange) in order to have a downstream effect that will create even more employment," Kalyalya said.

Treasury data indicates that foreign copper and cobalt mines have invested over $3-billion in Zambia's mining sector, the country's economic lifeblood since early 2000s.

Some of the foreign mining firms operating in Zambia are Canada's First Quantum Minerals, London-listed Vedanta Resources, Swiss firm Glencore International AG and Australia's Equinox Minerals Ltd..