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The Chamber of Zambian Mines has urged the government to maintain a stable investment environment to sustain copper production following the death of the country’s President Mwanawasa.

LUSAKA (Reuters)  –  The Zambian government must KEEP a stable investment environment in order to sustain copper production after the recent death of President Levy Mwanawasa, the head of the Chamber of Zambian Mines (CZM) said on Monday.

Mwanawasa died in a French military hospital last month.

CZM President Nathan Chishimba said in remarks broadcast on state radio that it was important to sustain Mwanawasa’s policies to encourage more investment.

Chishimba said Mwanawasa had personally helped to revamp mining operations in Zambia, which expects to produce 600,000 tonnes of copper in 2008, up from 550,000 tonnes last year.

“The last thing we need is adverse policies that will undermine gains that we have made,” Chishimba said.

“We call upon all leaders to have cool heads,” he added.

Analysts say foreign mining firms in Zambia are anxious about government policy on mining after Mwanawasa’s death.

Foreign firms have invested over $2.5 billion since 2000 when the mineral-rich country privatised its copper and cobalt mines, the country’s economic lifeblood.

Foreign mining firms operating in Zambia include London-listed Vedanta Resources Plc, Canada‘s First Quantum Minerals, Swiss firm Glencore International AG and Australia‘s Equinox Minerals Ltd.. (Reporting by Shapi Shacinda, Editing by Toby Chopra +260-977843609/260-95577 9523)

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By Shapi Shacinda

LUSAKA (Reuters) – Zambia has enough currency reserves to protect the economy in case the illness of President Levy Mwanawasa prompts some reduction in foreign investment, central bank Governor Caleb Fundanga said on Tuesday.

Fundanga said the only slight worry of the Bank of Zambia (BoZ) was rising oil and food prices, which threatened its single digit inflation target. However, he remained optimistic of achieving 7.0 percent annual inflation in December this year.

Fundanga said it was evident the illness of Mwanawasa, who is in a French hospital after suffering a second stroke, had caused anxiety among some investors but that there was “no need for panic”.

“The investors in the mines will continue exporting copper. It is possible that … some investors may decide to pull out, but we have enough reserves, $1.4 billion held by the Bank of Zambia and another $1 billion by commercial banks,” Fundanga told a news conference, adding Zambia had 5.6 months of import cover.

Mwanawasa impressed the International Monetary Fund and other Western donors by cracking down on government spending and launching an anti-corruption drive.

Fundanga said Zambia had investment pledges totalling $1.8 billion so far this year compared with just $1 billion in the first six months of 2007. The government has previously said a number of these investments have been fulfilled.

“Naturally, as a result of the illness of the captain, as some refer to the president, there are some people who might be feeling uncomfortable. Given this situation, are we vulnerable? Will all forex (foreign exchange) dry up? The answer is ‘no’,” Fundanga added.

He said mining and non-traditional sectors had continued to perform satisfactorily with copper export earnings for the three months to June just 0.1 percent lower than the previous quarter’s earnings, at $967.6 million.

Fundanga said non-traditional exports at $187.6 million at end-June were 12.3 percent above the $167.1 million recorded in the previous quarter ending in March.

“Favourable export earnings have led to the strengthening of the external sector reflected in the appreciation of the kwacha against major currencies and a 10 percent increase in international reserves to $1,338.4 billion in June 2008 from $1,216.3 billion in March 2008,” he said.

There were inflationary pressures from a 15 percent wage increase for civil servants from January and from higher global oil prices, which would put pressure on transport and commodity prices.

“However, these pressures may be mitigated by pass-through effects of the appreciation of the exchange rate of the (Zambian) kwacha against major currencies on account of external sector performance,” Fundanga said.

Fundanga said the kwacha appreciated 11.3 percent against the dollar in the three months to June to trade at an average of 3,259/dollar.

“We cannot give up on 7.0 percent inflation at the end of the year because we have enough food to feed ourselves and we will not necessarily be affected by global food prices,” he added.

(Lusaka newsroom + 260-977843609/260-955779523)


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By Shapi Shacinda

LUSAKA, July 14 (Reuters) – Zambia’s Konkola Copper Mines (KCM) will raise copper cathode output to 250,000 tonnes in 2008/09 from 150,000 tonnes last year and started commissioning a major smelter, a senior company official said on Monday. 

Sam Equamo, KCM’s communications advisor, said the southern African country’s largest copper producer had also completed some shafts at the Konkola Deep Mining Project (KDMP), which is touted to become the country’s largest copper producer. 

Output would peak at 500,000 tonnes by 2010, he added. 

KCM, which is majority-owned by London-listed Vedanta Resources Plc (VED.L: Quote, Profile, Research), operates the Nchanga open pit mine, Konkola copper mine, Nkana Smelter, Nampundwe pyrite mine and a satellite unit known as Fitwaola mine, which reopened in June after it was shut down last year. 

Equamo said construction works as the Nchanga Smelter was at an advanced stage, with some parts such as the Oxygen Plant and Acid Plant, already commissioned. 

The Nchanga smelter will have an annual processing capacity of 300,000 tonnes copper cathode. 

“It is expected that commissioning of the entire plant will start in a month or two with full operations starting later, depending on the smoothness of the commissioning stage,” said. 

The total amount to be spent on the smelter project is $372 million, he added. 

Equamo said the KDMP, where the company has previously said it would spend at least $1 billion on development, had made tremendous progress. 

“The sinking of number 4 Shaft is at around 450 metres while the headgear is at 60 metres of the ultimate height of 81 metres,” Equamo said. 

He said operations at Fitwaola Open Pit resumed last month and with the expected arrival of new equipment production should pick up. 

Equamo said KCM’s future looked bright due to major upgrades and expansion projects currently underway. 

“With the projects that we are undertaking, KCM is poised to produce around 500, 000 tonnes of copper per annum by 2010,” Equamo said. 

Copper mining is Zambia’s economic mainstay and the vast copper and cobalt mines are a major employer in this southern African country of 12 million people. 

Zambia’s other major copper producers are Mopani Copper Mines, a unit of Swiss firm Glencore International AG and Canada’s First Quantum minerals, Kansanshi mine, which is owned by First Quantum and Lumwana mine, a unit of Australia’s Equinox Minerals Ltd. (Reporting by Shapi Shacinda, Editing by Peter Blackburn)

Meanwhile … Konkola Copper shuts plant after protest continue reading below.

LUSAKA, July 14 (Reuters) – Zambia’s Konkola Copper Mines (KCM) said on Monday it had shut down a plant in its Nkana business unit as a precaution after a protest by some of its workers. 

KCM, which is majority-owned by London-listed Vedanta Resources Plc (VED.L: Quote, Profile, Research), did not say what impact the shutdown would have on production or when the plant, located about 350 km (219 miles) north of Lusaka, would be back in operation. 

“A small section of workers at the Nkana Business Unit of Konkola Copper Mines Plc. today staged an illegal assembly in connection with the just concluded negotiations for a new collective agreement between the two unions that represent mine workers and KCM management,” a KCM spokesman said in a statement. 

“The plant was shut down as a precaution.” 

Zambian state media said the workers were upset by reports that their representatives had agreed to a deal that fell short of their basic wage demands. 

There was no immediate comment from the leaders of the Mineworkers Union of Zambia (MUZ) and the National Union of Miners and Allied Workers (NUMAW), which represent workers at KCM. (Reporting By Shapi Shacinda; editing by Paul Simao and Peter Blackburn) (Lusaka newsroom + 260-977843609/260-955779523) 

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Posted on: Thursday, 3 April 2008

Zambia to resume receiving new applications for mining rights

LUSAKA, April 2 (Xinhua) — Zambia is to resume receiving new applications for mining rights from next month after 10- months suspension, The Post reported Wednesday.

Mines Minister Kalombo Mwansa was quoted as saying in a statement that all the technical work required to open the new cadastre system had been completed.

To this effect, the government had re-organized, codified and digitalized cadastral data and all the required logistics had been put in place in readiness for opening to the pubic, he said.

He said the system had been tested and had satisfied the government objective to have a more transparent, efficient administration and management of mining rights licensing process.

“The processing of license applications, renewals and transfers will now be done in a timely manner, further the system is designed to avoid overlaps of mining rights areas,” he said.

He said for the members of the public to familiarize themselves with the new cadastre system before receipt and processing of new applications for mining rights resume on May 2, 2008, the ministry had introduced open days for the general public.

He said open days would run from Aril 1 to 30, 2008.

The minister said efforts would be made for the mining cadastre regulations to be aligned with the new mines and minerals development act.

Zambia announced in June last year a halt effective from July 1, 2007 of new applications for mining rights in order to computerize its licensing system.

announcing the suspension, Mwansa said the suspension is part of Zambia’s efforts to weed out irregularities and simplify licensing procedures regarding the industry with massive inflows of foreign capitals.

(c) 2008 Xinhua News Agency – CEIS. Provided by ProQuest Information and Learning. All rights Reserved.

Source: Xinhua News Agency – CEIS

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Copper and uranium hopeful Kiwara – the second Aim-listed miner to take up a primary listing in Johannesburg this week – plans to complete a prefeasibility study and a feasibility study of targets in Zambia during the next two years, and could be producing in 2010, CE Peter Vivian-Neal said after the listing event.The company, chaired by Jubilee Platinum CEO Colin Bird, did not raise any capital through its Johannesburg debut, but would likely issue new equity within a year.

On Monday, Aim-listed gem producer DiamondCorp also made its debut on the JSE.

Kiwara was currently drilling at its 500-km2 prospect at the Kabompo Dome in North Western Zambia, where it planned to firm up a resource at the Kalumbila copper/nickel/cobalt deposit and the Kawanga uranium deposit.

Vivian-Neal said that Kiwara would complete a prefeasibility study on the prospect in 2009, and a feasibility study the following year.

He stated that the company might then decide to develop the mine itself, go into a joint venture (JV), or even sell it.

“There is the possibility we may follow the route of a favourable exit through JV agreements with major mining companies, or we may even dispose of the licence area through an outright sale,” said Vivian-Neal.

Kiwara currently had enough funding for its drilling programme, which it raised through its London listing in August last year, but would probably soon raise more.

It was “highly possible” that the company would come back to the market within a year, said Vivian-Neal.

There was also an issue about a lack of liquidity, with directors holding a significant portion of its shares.

“We would like to see increased liquidity,” he noted. “We are looking hard at the timing of the future fundraising.”

Vivian-Neal said that the timing of this was “completely results driven”.


Vivian-Neal said that the company was comfortable with its Zambian focus, after the country announced a new tax regime last month, in conjunction with a new mining code.

“It brings the country more in line with other mineral producing countries,” he said. “It doesn’t fundamentally change our determination to continue in the country.”

However, Vivian-Neal conceded that this had caused some concern for miners in the country.

“While we are focused on Zambia, we are looking at other targets in the country,” stated he. “We’ve looked at opportunities in Uganda and we will look at opportunities throughout Southern Africa.”

Source: Mining Weekly

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Posted: April 01, 2008 by David Pett

Equinox Minerals Inc. shares were down 10% on heavy volumes Tuesday as Zambia gets set for to raise mining taxes this month.

Zambia began enforcing its new tax code today that will see mining firms pay more in royalties and other taxes despite objections that the government has reneged on tax exemption deals with foreign investors.

All foreign firms in the copper-rich southern African nation are required this month to start paying the higher taxes, including Canadian-owned companies Equinox and First Quantum Minerals. 

Equinox’s copper production is exempt but its future uranium production would be subject to the tax.  

The mineral royalty has increased from 0.6% to 3%. and corporate taxes increased from 25% to 30%. The African country also introduced a 15% variable profit tax on taxable income above 8% and a minimum 25% windfall profit tax.

Equinox shares were down 50¢ to $4.38 at 10:30 a.m. ET, and First Quantum shares were down 3% or $2.57 to $80.67. 

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By Geoffrey Kapembwa

March 26 (Bloomberg) — Zambia‘s parliament approved an amendment to the Mines and Minerals Act that will increase taxes and abolish existing agreements between the government and mining companies, the Zambian Chamber of Mines said.

The bill, which will be signed into law by President Mwanawasa on April 1, will lift royalties on sales fivefold to 3 percent and increase corporate income tax to 30 percent from 25 percent. That will raise the effective tax rate on miners to 47 percent from 31 percent.

The government’s “unilateral decision to dishonor existing development agreements” is disappointing, Fred Bantubonse, general manager of the chamber, said in a telephone interview from the capital, Lusaka, late yesterday. “This is arm twisting.”

Zambia, Africa’s largest copper producer, expects to earn $450 million in additional revenue this year from higher mining taxes as it seeks to benefit from the metal’s seven-year rally, Kolombo Mwansa, the southern African country’s mines and mineral development minister said on March 4.

The law will result in miners reconsidering any expansion projects because of poor returns, Bantubonse said.

“Any bad law always affects future investment,” he said.

Copper accounts for about 70 percent of Zambia’s export income and production has been rising since the nation sold off state-owned mines 1999, almost three decades after they were nationalized. The proposed increase in taxes comes amid record profits earned by companies including Vedanta Resources Plc., India’s largest copper producer, and First Quantum Minerals Ltd., a Vancouver-based miner of copper in Africa.

— Editor: Athol Bolleurs, Dylan Griffiths.

To contact the reporter on this story: Geoffrey Kapembwa in Lusaka via the Johannesburg bureau at +27-

Last Updated: March 26, 2008 06:44 EDT

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