Reeling from the worst crisis it has faced this century, which has seen it lose millions of dollars a month in a depressed copper price environment, the Zambian mining industry is to push for a long-term strategic consensus to promote the growth of not only the mining industry, but also the entire economy, stated the Zambia Chamber of Mines (ZCM) last month.

“As an industry, we carry the weight of an entire nation on our shoulders in terms of investment, jobs and foreign exchange earnings,” ZCM president Nathan Chishimba said at a media conference in Lusaka, the Zambian capital.

He said that the challenged state of Zambia’s mining industry raised long-term questions over the country’s economic development, which could not be avoided.

Chishimba stated that all the industry’s stakeholders had to come together and agree on the conditions which best promoted the growth of the mines and the broader economy. “As an industry, we are ready to create dialogue on this vital strategic issue on which the future of our nation depends.”

He averred that the ZCM, with the “full weight of support” of its members, would engage with stakeholders on this topic. Chishimba also announced that an ‘All Zambia’ conference would take place during the course of 2016, as part of a drive to reach long-term consensus on Zambia’s economic diversification.

He further pointed out that since 2000, on the back of rising copper demand from China, the Zambian copper mining industry had led the nation’s development, spurring gross domestic product growth and helping to achieve yearly growth rates of 7% to 10%.

Chishimba added that the industry had “ploughed” more than $10-billion into new mining ventures, trebled the country’s yearly mining output to about 800 000 t and increased employment fourfold to more than 80 000.

“This mining growth has been key in taking government tax revenue from less than ZK500-million in 2000 to a peak of ZK8-billion by 2010,” he highlighted.

Chishimba said that the mining industry was the basket which held all the proverbial eggs. “Working together, we have to create a high-growth, diversified economy which spreads risk and opportunities across the economy, creates more jobs and widens the tax base.”

However, he stressed that the current commodity price crisis highlighted that Zambia should not be relying only on mining for its future.

As a measure of the industry’s unity of purpose, the ZCM media conference was attended by senior executives of copper miners First Quantum Minerals, Konkola Copper Mines, Mopani and Barrick Lumwana and other senior industry figures. These are Zambia’s four largest copper mining companies, accounting for about 70% of the country’s yearly output, the ZCM noted.

The objective, according to Chishimba, was to provide context and understanding for the slump facing Zambian and global copper miners after a reduction in demand in the past five years from China, the world’s largest consumer of copper at about 45% of world production.

The reduction in demand from China had led to a five-year slide in the copper price, which was about 60% off its 2011 peak, triggering production cutbacks and layoffs in all of the world’s major copper mining nations, from Zambia, the Democratic Republic of Congo and Chile to Australia, Canada and the US.

The conference also heard that the Zambian mining industry faced specific local constraints, such as a debilitating power shortage that had reduced production capacity, increased costs and, in certain cases, forced the closure of operations, with the loss of many jobs.

“We suffer from both production challenges, such as old mines, deep orebodies, low grades, low productivity and regulatory challenges; for example, a constantly changing policy and tax environment. The effect is twofold. Firstly, our copper is expensive to produce and, secondly, investors are reluctant to start new mines or expand existing ones,” Chishimba explained.

On the long-term prospects for the global mining industry, Chishimba said there had always been demand for copper on the back of industrialisation and modernisation of the world economy, and “nothing suggested that this is about to change”.

However, he stressed that, for Zambia to benefit from that continued demand, the country’s mining industry needed to become more competitive.

“There are new, low-cost mines coming on stream in other countries that can thrive in this low-price environment. Unless Zambia takes action now to address our challenges, so that we can compete with these other countries, our future as a copper-producing nation is in peril,” Chishimba warned.

He added that the challenge was for the industry and the country to learn the lessons of the past and the present.