Copper Prices up 20 percent, says Zambia’s Central Bank

Copper production in Zambia, Africa’s top producer of the red metal, grew 20 percent in the first quarter 2014 compared to a year earlier, raising hopes of a resurgence in the industry.

Copper outturn rose to 174,407 tons in the first quarter 2014 compared with 170,948 tons mined by various mining companies at various units during the same period last year, the Lusaka-Based Zambia’s Central Bank says in its fortnightly statistics report.

Copper exports jumped 30 percent to 173,421 tons since the beginning of the year compared to 153,306 tons exported in the same period last year, amid increased production at various old and new mines operating in the country, chiefly Copperbelt, the country’s mining hub and northwestern provinces.

Cobalt production in the three months to March 31, 2010 jumped to 1,921 tons from 1,081 tons last year, the Central Bank says. Exports of cobalt increased to 1,905 tons from the 1,251 tons exported during the first quarter of 2009.

The rise in copper production in Zambia in recent weeks has been buoyed by the upward pricing of the red metal on the London Metal Exchange.

The value of the red metal (cathodes) surged  over 10 percent in recent weeks to US$7,342/ton compared to less than US$7,000/ton recorded mid last year, which raised fears among players in the mining and copper industry, chiefly in Zambia.

The Chamber of Mines in Zambia, a consortium of foreign mining companies operating in Zambia last year raised eyebrows over the falling copper prices that dropped slightly below US$7,000/ton, signifying a drop pf 15 percent during the year under review.

The red metal lost U$3,000 per ton over the last two years, spurred by a slowdown in China’s growth, raising concern over the mines’ profitability.

“If low copper prices continue the industry will have to review its operations in the country, Emmanuel Mutati, President of the Chamber of Mines in Zambia had lamented to reporters at the height of the fall.

“In particular, mining firms might be forced to address their operations through cutting down expenses which include labour costs”,

Global indicators had shown then that the fall in prices was likely to continue as China’s economy had slowed down.

China’s growth rate is hovering well above 7 per cent a year, but a slow-down is happening, and the near 10 per cent growth of the previous decade is gone.

It was feared that unless the trend is reversed, most of the multinational companies in the mining industry were threatened with closures, reminiscent of the 2009 spurred by the global recession.

However, with the resumption of most of the new projects including China Nonferrous Metal Mining Group Corporation Luanshya Copper Mines (CLM), China’s NFCA Chambishi mine hope is still there, industrial analysts say.

The much awaited production at the Konkola Deep Mining Project and ramp up at Lumwana Mining Company, copper production in the country is expected to surge more than US$7,000/ton.

Since privatization in the late 1990s, mining companies have ploughed in over US$8 billion in the industry, according to the chamber of mines.

Copper, Zambia’s main export, accounts for 70 percent of Africa’s production and 60 percent of country’s total exports, with China taking the major share of imports of the red metal.

Other key consumers of Zambia’s copper include Switzerland and the United Kingdom.

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