sharing in governance of extractive industries
LUSAKA – Zambia, Africa's leading copper producer, said on Tuesday that it expects a strong performance by the mines over the long-term
due to rising metals prices and has urged mineworkers' unions to
support new investors.
Mines minister Maxwell Mwale told Reuters the future of copper mining appeared very promising as the price of the metal,
used extensively in construction and wiring, was expected to remain
high over the long-term due to increasing demand.
"The outlook for copper mining is very bright. Copper will continue to be sought because it is ideal for construction and is a very good
conductor of electricity which cannot easily be substituted," Mwale
said in an interview.
Mwale said keeping the existing investments and attracting other experienced mine investors would help Zambia reap maximum benefits from the rising global metals prices.
Copper hit $7,527 a tonne last week, its highest peak since April 27, as fears of a double dip downturn and European sovereign debt eased, while demand expectations improved.
By 09:56 GMT, copper for three-month delivery on the London Metal Exchange traded at $7 250/t from $7 425/t at the close on Monday and compared with a session low at $7 241,25/t.
"We need to invest in exploration activities and that will require a lot of investment," Mwale said.
Mwale said the government would maintain existing taxes as stability was important for the country to continue attracting investments.
Analysts say Zambia's mineral royalty at 3% is favourable compared with others of around 5%. Corporate tax is charged at 25% and profit variable tax at 15%.
Zambia has continued to attract investment to lift output to a 750 000 t target in 2010 and one-million tons by 2012, with $5-billion
ploughed into the mining sector – its economic lifeline – in the last
Mwale said mining unions should support government efforts to attract investors in mining as that would create more jobs.
Zambia's largest mine workers' union said in July that it planned to block Brazilian Vale's development of a $400-million copper mine because of concerns about its bad labour relations record.
"The union should consider the socio-economic benefits of the project and look at other benefits such as Vale's expected contribution to the treasury through taxes," Mwale said.
He said Vale inherited the problems over which they were in dispute with the union at Voicey's Bay Nickel mine in Canada.
The mines are a major employer in Zambia, a country of over 12-million people.
Foreign mining companies in Zambia include London-listed Vedanta Resources, Canada's First Quantum Minerals, Equinox Minerals, Glencore International of Switzerland and Metorex of South Africa.
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