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SAIMM ZAMBIAN BRANCH
TECHNICAL PRESENTATIONS
INTEGRATED MINING INDUSTRY DEVELOPMENT
DR SIXTUS C MULENGA
CHIEF EXECUTIVE OFFICER – TRANTER ZAMBIA LTD
CHAIRMAN - SAIMM ZAMBIA BRANCH
25 NOVEMBER 2009
CHINGOLA – ZAMBIA
INTEGRATED MINING INDUSTRY
DEVELOPMENT – ZAMBIA
• Introduction
• Mining industry in Zambia has historically been the engine
of national development and continues to be so.
• Mining at large scale in Zambia dates back to the early
1900s, the main metals being copper, cobalt, lead and
zinc.
• Zambia has a large potential for a diverse mineral resource
base covering base metals, precious/semi-precious
stones, industrial minerals, energy minerals, and recently
the likelihood of oil presence.
• The country under its National Vision 2030 aspires to
become a prosperous middle income nation. Mining sector
is geared to make a significant contribution to achieving
this goal
INVESTMENT IN MININING INDUSTRY AND PRODUCTION
•
•
•
•
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Copper production grew rapidly in the sixties and seventies when
the mining industry was under private ownership and investment
inflow was large.
Production peaked at about 800,000 tonnes of Copper per annum in
the seventies, making
Zambia was among the top three world’s top producer of copper
and cobalt in the sixtees and seventees.
During the eighties when the mines were nationalized, the revenue
from the mining industry was utilized mainly for national
infrastructural development, consequently leaving little for recapitalization.
By late nineties, copper production had reduced to about 250,000
tonnes per annum.
In the late 1990s to early 2000s, the mining industry was liberalized
under a private-sector investment enabling environment. This has
resulted in significant investment inflow into the sector amounting
to about US$3 billion foreign Direct Investment from 2000 to 2007.
Copper production has increased from a low of 250,000 tonnes in
1999 to over 500,000 tonnes of copper per annum in 2008. It is
projected that copper production will reach 1,000,000 tonnes per
annum by year 2012.
INVESTMENT IN MININING INDUSTRY AND PRODUCTION
• Furthermore, this new business-enabling environment
has resulted in new mines being developed in
provinces other than the Copperbelt. These are; First
Quantum Minerals’s Kansanshi Mine and Equinox’s
Lumwana Mine in Northwestern Province respectively
and Albidon Ltd’s Munali Nickel Mine in Southern
Province.
• Additionally, new projects have been implemented.
Major ones being; the Konkola Deep Mining Project,
the Mufulira Smelter, the Chambishi Copper Smelter,
the Nchanga Copper Smelter and Acid Plant, the
Changa satellite Open Pits, the Muliashi Mine
development and the Mindola at depth Project.
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
COPPER PRODUCTION 1990 - 2006
1,200.00
1,000.00
800.00
600.00
400.00
200.00
0.00
CAPITAL INVESTMENT (US$ MILLION) 1990 - 2006
900
800
700
600
500
400
300
200
100
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
KEY FACTORS FOR INTEGRATED DEVELOPMENT OF MINING
INDUSTRY
Zambia can achieve its National Vision 2030 through integrated mine development
as this encapsulates the key aspects of sustainable development.
The Key Pillars should be:
•
Government
To create an investor friendly, enabling environment and framework for
achieving sustainable national economic development
•
Local Investors
Local entrepreneurs should invest in mining industry so that they become
anchors of long term growth of the industry.
•
Foreign Investors
These are essential to have as they bring international players in the economy.
They have large capacity for investment and technology transfer.
•
Diversification of Mineral Base and Value-Adding
Essential to provide the materials required for national growth and maximise
returns on national mineral resource exploitation.
KEY FACTORS FOR INTEGRATED DEVELOPMENT OF
MINING INDUSTRY
•
Investment
The country requires both foreign direct and domestic investment
respectively. The country has a low domestic investment portfolio and hence
the much needed drive to attract foreign direct investment (FDI). New
investment will continue to come to Zambia as long as the country maintains
globally competitive incentive regime. For example, the Zambia Development
Agency (ZDA) incentive package has generated a significant flow of
investment into the country to-date.
•
Energy
Energy is a lifeblood of any industry. In Zambia, mining industry is the major
consumer of energy. To achieve the goals of integrated mine development,
given the global ever souring oil prices as well as the energy deficits being
experienced, the mining industry should be a major player in the development
of alternative energy sources, such as coal and natural gas.
•
Physical Infrastructure
Mining industry by necessity demands an elaborate infrastructural setting of
transport network, power network, housing, telecoms, social services such as
health and education, in order to operate efficiently. This infrastructure
although initially developed for the mining industry becomes a catalyst for the
development and growth of the local area and the nation at large.
KEY FACTORS FOR INTEGRATED DEVELOPMENT OF
MINING INDUSTRY
In order to achieve sustainable development, the
following conditions are essential:
• Political Stability
Peace and stability is essential for sustainable
development, as it provides security of investment.
Zambia has been a haven of peace in the region since
it came to being.
• Enabling Policy and Governance
An enabling investment environment is essential for
attracting foreign direct investment. Good governance
with transparency energises the economy.
KEY FACTORS FOR INTEGRATED DEVELOPMENT OF
MINING INDUSTRY
• Adequate Mineral Resource Base
New mines can only be developed if economic
minerals resources are identified. This requires huge
investment in mineral exploration and an open and
transparent system for allocation of exploration rights.
Mineral exploration being a high risk venture requires
global competitive incentives to attract investment in
the sector.
A new cadastral system has been established under
the New Mines and Minerals Act which aims at
promoting exploitation of diverse minerals other than
soley depending on copper.
KEY FACTORS FOR INTEGRATED DEVELOPMENT OF
MINING INDUSTRY
• Human Resources
Sustainable development can only be achieved if there is a
solid base and an ever adaptive human resource base.
Mining industry being one of the major employers has a
major role to play in the development of skills in the
country, as exemplified by historical performance.
Over the years, the Zambian mining industry has
contributed greatly to human resource development
through mainly universities and higher learning institutions
scholarships and on-the-job training programmes
respectively.
CONCLUSION
•
Mining industry in Zambia will continue to contribute to National Sustainable Economic
Development given the investor- enabling environment that the government has created.
•
Furthermore, experience worldwide has shown that participation of local entrepreneurs in
investing in key sectors of an economy, has created a sustainable base for national
economic development.
•
Foreign investment is essential for growth and technology transfer for any country now
that we all live in a Global village.
•
Zambia should continue to improve conditions to attract both local and foreign investment
in the mining industry.
•
The unprecedented increase in mineral exploration activity is likely to bring about mineral
diversity in the mining industry. The industry is booming as exemplified by the many
mining development projects in progress and in the pipeline.
•
The challenges include how these different facets of the economy are brought together to
ensure the strength of each sector is fully exploited for the common good.
Zambia’s mining industry is on the right track and will be a great contributor to the
achievement of the National Vision 2030. Zambia shall become a prosperous middle
income nation.
THANK YOU