THE MMD has said it is satisfied with the results of the decision taken to open up the mining industry to foreign investment as it has led to a dramatic turn-around in the performance of the sector.
Finance and National Planning Minister, Situmbeko Musokotwane told management at Konkola Copper Mines (KCM) that as a result of that decision, an industry that had all but collapsed 10 years ago was booming once again, with annual production of copper set to return to the peaks of the 1970s when Zambia ranked among the top five producers of the red metal.
“This year, for the first time since the 1970s, we will be producing nearly 700,000 tonnes of copper.
“Things have improved dramatically from the day when the Government took the almost inconspicuous decision to open up the industry to foreign investment,” he said.
Dr Musokotwane said just 10 years ago, the Zambian economy was in deep crisis with the mining industry in a collapsed state and production down to just 220,000 tonnes per annum from more than 700,000 tonnes in the 1970s.
“We had lost two-thirds of our production capacity…a huge segment of our economy was lost, while at the same time population had risen from under four million in the ‘70s to between 10-12 million; more people to take care of with less resources to do so,” he said.
He said the ‘contradiction’ was responsible for the deterioration in the economic and social sectors.
Dr Musokotwane said Government was “very satisfied” with the overall results so far of the decision to open up the mining industry and with the contributions of investors like Vedanta Resources which has spent more than $2 billion on new investments in KCM to revive an ailing operation into a major player in the Zambian economy.
He said now that the industry was performing well, the Zambian people were expecting increased contributions from the mining houses to the national treasury so that the Government could mend the roads, build more hospitals and schools.
Government would do all it could to ensure that mining houses were producing at a cost that made them competitive on the international market.
“South America produces at 60 cents per pound. Our costs are way above that. We have to find a way that enables us to be more competitive so that we can survive,” he said.
KCM Chief Executive Officer Kishore Kumar said KCM looked forward to the Bill on Partnership Agreements coming up in Parliament.
He appealed to the Government to look into the factors that were responsible for the high cost of copper production in Zambia, like unstable and expensive power, saying KCM had suffered damage from frequent outages and unstable loads.
He said just as Government had divested from telephony, it should also consider divesting from power supply.
[Times of Zambia]
Munagulisa chalo bamambala. If more politicians in this country were thinking about the next generation instead of the next election, it might be better for Zambia.
“Dr Musokotwane said just 10 years ago, the Zambian economy was in deep crisis with the mining industry in a collapsed state and production down to just 220,000 tonnes per annum from more than 700,000 tonnes in the 1970s.”
What a huge difference. That is a drop of about 68%. Wow
“He said now that the industry was performing well, the Zambian people were expecting increased contributions from the mining houses to the national treasury so that the Government could mend the roads, build more hospitals and schools.”
I think he is hinting at something.
“He said just as Government had divested from telephony, it should also consider divesting from power supply.”
I support the privatization of ZAMTEL. I do not support the privatization of ZESCO. Reason, ENRON in California. If ever the privatization of ZESCO had to happen, it should come with mountains of regulations.
Blah blah production has gone up by whatever impressive figures you want to quote.The question is,are there any tricle down effects comensurate to the quoted figures? None.so MMD just shut up & prepare for exit
Musotwane said “We had lost two-thirds of our production capacity…a huge segment of our economy was lost, while at the same time population had risen from under four million in the ‘70s to between 10-12 million; more people to take care of with less resources to do so,”
Kaunda’s Humanism,give birth and Govt will take care and everything collapsed.The path Kaunda took was really ans is still expensive for us.I was very rich after independence but somebody ate my share instead of investing it.
Privatization to foreigners of everything that is Zambian. Lowering tax for every firm that is not Zambian.
That is what these guys are committed to. While other governments like the Libyan and Brazilian governments are making investments in other countries and building their reserves, Zambia is busy playing the typical African country that is too dull to see that its being robbed.
We cannot celebrates gains in the mining industry. We can see that now their corrupt minds are set on ZESCO. There is not a single developed country that has done this to be where they are. It is folly to believe this lies that selling everything into foreign hands is the only answer. Other governments are consolidating their wealth, we are busy giving away ours. What a shame.
What is conveniently leaving out is that in 1970, all the mines were 100% owned by Zambians and all the profits were used to build the infrastructure (houses, roads, stadiums, etc) that you see in the 5 Copperbelt towns. Show us what these mines have done. . . .
” MINING sector contributions to Zambia’s Gross Domestic Product (GDP) over the last decade have not been matched by commensurate contributions to domestic revenues, finance minister Situmbeko Musokotwane has disclosed. ”
Translation: the mining sector is reaping record profits, but they are not paying taxes. Or keeping their profits in the country.
Govt in talks with mines over tax – Musokotwane
By Joan Chirwa
Tue 13 July 2010, 14:00 CAT
The growth in the mining industry should trigger growth in other sectors of the economy. Though much has been done in import substitution of inexpensive things such as soaps or basic consumer goods, enterprises that produce these import substitutions need growth in terms of financing and property rights – property rights in the sense that a lot of imitations flood the market. With the increased revenues from the mines – which everyone should advocate for and go further in demanding social amenities as was under ZCCM- our national treasury should not just be for stocking up but cutting across the economic sectors through low interest financing from the commercial banks. This will mitigate the risks of collapse in other sectors of the economy.
9 Mavimba,
The problem is that billions of dollars are extracted from the Zambian economy every year. That is money that should be going into economic diversification. The fact that this is not happening is a crime against every Zambian living and yet to be born.
We need to inject hundreds of millions into agriculture, manufacturing, infrastructure, and money from the mines comes free. Loans from the IMF must be paid back with interest. Foreign investment is only here to extract a multiple of what they invest. For every dollar they ‘bring’ (as neoliberals like to say), they are looking to extract 5 to 10 dollars from our economy in profit. That is not development. That is simply a return to colonialism.
We need to tax the mines $1.2 billion a year, and invest it ourselves.