Despite the difficulties facing the global mining industry, Zambian copper production increased by 14% year-on-year in 2009, reaching 697 860 t, boosted by the production from the Lumwana copper mine, in April, reports market research house Business Monitor International (BMI).

This was highlighted in BMI’s ‘Zambia Mining Report Q3 2010’.

With cobalt production also set to receive a boost from the restarting of the Chambishi Metals smelter, this bodes well for the wider mining industry outlook in 2010 and beyond, the report states.

“Zambia has long been considered a stable investment destination, with good mining sector regulations,” the report states.

BMI estimates an average yearly growth rate of 6,4% for the Zambian mining sector over the forecast period from 2010 to 2014. It believes that copper and cobalt will remain key production sectors.

Globally, the country is the seventh- largest producer of copper and the second- largest producer of cobalt. Major foreign investors in Zambia include Canadian miner First Quantum Minerals, UK-based Vedanta Resources, Australia’s Equinox Minerals and South Africa’s Metorex, the report states.

China Maintains Investment in Zambia

In May 2010, Zambian President Rupiah Banda told the local media that China would provide a total of $5-billion in loans to private Zambian mining companies, as part of Beijing’s ongoing drive to acquire interests across Africa’s mining sector. Simultaneously, China had also stated that it would provide equity totalling some $1- billion to Zambia to help finance the construction of a new 600-MW power station expected to be completed in 2017, says the report.

These recent moves by China tie in with the long-held view that China will continue to play an evermore important investment role in African mining in the future.

“Zambia is widely regarded as a low-risk investment destination and has attracted high levels of foreign investment in recent years. “The government has concluded drafting a revised minerals empowerment policy that aims to stimulate greater participation of Zambian nationals in the country’s vast mining industry. “The government also plans to develop large mining assets in all major provinces to create greater employment opportunities, which would address growing concerns about the uneven distribution of mining wealth,” the report says.

Zambia has a vast amount of metals, gemstones, industrial minerals and potential energy resources, including coal, hydrocarbons and uranium. For several years, Zambia’s economy has been based on mining, particularly copper and cobalt, the report states.