Mining windfall buys critical time: with Levy Mwanawasa back in the driving seat, Zambia is reassessing its fortunes and how best to get on with business and life, neither of which has been particularly easy. Now Zambians will be watching closely to see if he can improve on his first term. Report by Tom Nevin.

Author:Nevin, Tom
Position:ZAMBIA - Levy Mwanawasa
 
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Economically, Zambia is on an upswing, riding the positive cycle of commodity performance and cashing in on copper prices not seen since the 1960s and 70s. Levy Mwanawasa's most urgent job now is to ensure that Zambia's newfound wealth, coupled with recent debt forgiveness and a fresh flow of development aid, finds its way to the millions of very poor Zambians.

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Although the election was one of the roughest on record in Zambia, Mwanawasa, 59, in power since 2001, banked on his image as safe, dependable and proven and this was sufficient to tilt the ballot in his favour. On his watch GDP rose by nearly 5%, with inflation in single digits, while next-door Zimbabwe's surpassed 1,200%.

"There's great poverty in Zambia that has to be tackled," Mwanawasa conceded, and he called for more time to make further inroads against poverty, of which "I have only just scratched the surface".

The mining industry, most of it comprising copper extraction and refining, blossomed suddenly when the China-led demand for base metals exploded two years ago sending prices through the roof.

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According to the Insight Africa website, Chinese investment in copper mines and other industries amounts to some $300m.

The election highlighted the sensitivity of industrially and strategically important metals, such as copper, cobalt and zinc and the extent to which they have risen in prominence with growing demand and the sustained run-up in metals prices. These sent waves rippling across international relations, politics, economic development and human rights communities.

At latest estimates, some $1bn will be invested in new and existing mining operations in Zambia over the next three years. According to the country's permanent secretary for mines and mining development, Lennard Nkhata, Zambia's copper mines are currently producing some 400,000 tons of the metal a year and are expected to exceed 700,000 tons next year, a production level not seen since the 1970s.

Canadian, Australian and South African mining houses are showing renewed interest in the Zambian mining sector and are dominating exploration and mining of copper and other base minerals, along with gold and gemstones.

In the forefront is Equinox Minerals, developers of the $800m Lumwana copper mine, one of the world's largest undeveloped copper deposits. The project, due to go on stream in 2008, has an anticipated yield of nearly 170,000 tons a year in the first six years of...

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