Zambia 2017 Copper Output May Climb to Record as Price Reboundsby
Nation to maintain tax regime for stability, minister says
Producers are ‘beyond breakeven’ with price close to $6,000
Copper output in Zambia, the continent’s biggest producer after Democratic Republic of Congo, may climb to a record this year as prices rebound, Finance Minister Felix Mutati said.
Production is set to exceed 800,000 metric tons, he said in an interview Thursday in Kenya’s capital, Nairobi. That would beat the record 790,007 tons reached in 2013.
Output of the metal, used in plumbing and wiring, rose 8 percent to 770,586 tons last year, boosted by higher output from a First Quantum Minerals Ltd. operation that started up in 2015, the nation’s Chamber of Mines said Feb. 3. While copper surged 18 percent last year after three straight annual declines and has exceeded $6,000 a ton 3 times since Nov. 11, it’s still 42 percent off a February 2011 record.
“It’s looking cheerful, the price is close to $6,000 -- at that level, most of the mines in Zambia are making money, they are beyond breakeven,” Mutati said.
Low water levels at the hydropower dams that supply almost all Zambia’s electricity, as well as frequent royalty changes, hurt potential growth in 2016, chamber President Nathan Chishimba said in January.
“We are maintaining stability in the mining-sector tax regime, it’s in the law,” he said. “We have told mining companies: ‘We are not touching you,’ and the mines are clear in their minds about this.”
In December, Zambia abandoned plans to charge a 7.5 percent levy on imported copper concentrates from Jan. 1. Mutati had made the proposal in his budget a month earlier. Concentrates are a mixture of crushed rock that contains about 40 percent copper, which is then smelted to increase the metal content to above 90 percent.