moodys

Rating agency Moody’s Investors Service yesterday published research that analysed Glencore’s planned investment in the Mopani copper mine in Zambia with key findings that the increased copper production will raise Zambian government revenues, contribute to fiscal consolidation and return public finances to a sustainable path.

Moody further projected that that Glencore’s planned investment will contribute to bringing Zambia’s real GDP growth to 5% or more in 2018, by adding up to 0.5% of GDP that year.

The credit rating agency also said that that the investment is credit positive for Zambia because it will help drive growth.

“Glencore’s decision to invest now, when Zambia’s economy faces challenges, sends a positive signal of investor confidence, ” the report said.

However, the rating Agency said that this update did not contain any credit rating action and that Zambia’s current B2 rating and Stable outlook remained unchanged.

On 30 March, Swiss commodity trading and mining company Glencore plc announced plans to invest more than $1.1 billion in the Mopani mine in Zambia (B2 stable) during 2016-18. The investment, which will help improve the mine’s operational efficiency and extend its life, is credit positive for the sovereign because it will help drive growth.

Glencore’s investment will reduce production costs and increase the efficiency and profitability of Mopani’s copper mine shafts, allowing them to raise production and take advantage of the potential for a gradual recovery in copper prices over the next three to five years.

We project that this will contribute to bringing Zambia’s real GDP growth to 5% or more in 2018, by adding up to 0.5% of GDP that year. Increased copper production will also raise government revenues, contribute to fiscal consolidation and return public finances to a sustainable path. Additionally, Glencore’s decision to invest now, when Zambia’s economy faces challenges, sends a positive signal of investor confidence.

The investment marks a positive turnaround for the mine and Zambia’s entire copper sector, which has been stagnating following a sharp decline in copper prices and severe electricity shortages since 2015. In 2014, before commodity prices began falling, the Mopani mine produced about 110,000 metric tons of copper, or about 15% of the sector’s output .

In September 2015, Glencore, which has a 75% stake in the Mopani mine, announced that it would suspend its operations in the mine for 18 months owing to a combination of low copper prices, electricity shortages and an unstable and unconducive tax regime. However, the mine’s operations were instead reduced by about half, to 46,933 metric tons from about 93,000 in 2015. The investment will allow the mine to return to its productive capacity in 2018.

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48 COMMENTS

    • Edgar Lungu with his PF counterparts have n capacity to take advantage of favorable conditions.Facts, despite fuel prices being lowest in a 7 years, Edgar and his friends have failed lamentably to guarantee supply, secondly even after a bumper harvest Edgar and minions have failed to secure food security, as we speak Edgar has no idea about the maize situation in the country.

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    • The sort of news to make UPND cadres angry.

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    • This is no news. Glencore said exactly the same “news” last year when they laid off 4,800 miners, that they would continue with reinvestment in growth projects in time for 2018 reopening. That implies that they also expect copper prices to bounce back by 2018. How come PF wants to take credit for this “globo” news?

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    • It takes foreign investors to give hope to the Zambian economy and it takes Zambian politicians to dash that hope by forever formulating inconsistent policies to realise the hope.

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    • Please dont politicize this investment. Its not because of PF. Either way, its a welcome development.

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    • Ba Dr Neo Simutanyi is a fake doctor………..thís is a proper analysis by proper analysts not the poorly researched paper he wrote about Zambias economy. Viva ECL……abash prophets of doom!

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    • ZAMBIA HAS ALWAYS BEEN PRODUCING ENOUGH TO SUSTAIN AND IMPROVE THE LIVES OF ITS CITIZENRY, THIS IS NOT COMING AS NEWS TO US. WE HAVE ALWAYS SAID THAT ZAMBIA IS BLESSED WITH ABUNDANT RESOURCES. THE MAJOR PROBLEM WE HAVE AS A COUNTRY IS THAT POLITICAL POWER GOES INTO WRONG HANDS. CORRUPTION, DISHONESTY AND LOOTING BY OUR LEADERS IS WHAT HAS PUT US INTO THE REVERSE GEAR AS A NATION. THIS IS THE REASON WHY THIS AUGUST WE WANT TO KICK OUT THESE CRIMINALS IN PF WHO HAVE RAVAGED OUR ECONOMY AND BRING INTO OFFICE MEN AND WOMEN OF INTEGRITY WITH A PASSION TO SERVE ZAMBIANS AND DEVELOP ZAMBIA. WE WANT TO TRY UPND BECAUSE THEIR MANIFESTO IS GOOD AND HAVE QUALITY PERSONNEL. VIVA HH VIVA! VIVA UPND VIVA! ZAMBIA FORWARD.

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    • Glencore is talking about their investment or project coming to fruition by the year 2018 and not now imwe Ba dull PF cadres? Read and understand!

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    • UPND will choke to death. Your Anglo- America will find no space in Zambia. PF and it’s current investors will ensure the economy bounces back quickly. Even power cuts ate already reducing. Viva Lungu, aluta acontinu.

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    • This is really bad news for HH and team … to compound it even worse for them, power outages did for the first time this week to start normalizing!!! Any good news for the smart people of the Zambian Enterprise is bad new for UPND.

      We will retire HH for good … once and for all after entering him in The Guinness Book of World Records as the first Zambian to have lost the presidency 5 times in a row!! The media does not run this country, the Diplomats don’t run this country, the Elites don’t run this country … We, the people do!!!

      I endorse ECL as the next CEO & President of the smart people of the most beautiful country God gave man on the continent of Africa! I am B R Mumba, Sr … and I approved this message.

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  1. Okay yikaali, bachi ifwe tulelolela ba mcm to announce at mid month kaili ni jobo bakaamba tulelolela ba Amos Chanda said mopani will announce at mid month that they will start projects that will make a significant number of XMINERS to return to work say April, may, June 2016!

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    • What you dont understand about efficiency; it is about producing more at less cost…this what is called modernizing: it is beggars belief to think that you can sack staff then hire the selfsame people. Mopani mine is an old mine with outdated labour intensive methods!!

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    • Has Edgar Lungu improved electricity supply and the tax regime which are the conditions set by Glencore iwe fake Hakainde Mazoka? Viva UPND, forward with HH.

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  2. It can only work with UPND in power not malabishi a banthu a PF.

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    • If UPND wins in August, the timing will be great when mines jump back to production in 2018. At least the additional taxes will be spent on development projects by UPND instead of being stolen by Lungu and his cadres.

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    • We know you want to channel all the money to develop southern province it will never work ECL is developing the whole country.

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  3. Lekeni ba PF basekele mofyo babombele. The Prophet said it that in the remaining 3 months things will change in PF favour and that will push KING SOLOMON (Lungu) to second term to make him finish building GOD’s house. Now that the war against smugglers has started what is your next political mileage ba UPND?

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  4. Ba LT-the headline is misleading-Zambia’s grow hasn’t improved,what if these investment prospects won’t come form these guys?

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  5. Then some empty tin from govt will come out and point to this statement yet a few months ago the selfsame people were writing off these Ratings agencies. Mopani had to invest to extend the life of this mine by 25 years…this is the same mine we were told by 30 years about that there was 10 years worth of copper….there hasn’t been any tangible gains in the price of copper. All those futile negotiations to prevent the job losses probably just cost the tax payer more in taylor-made fuel subsidies, tax breaks to these selfsame mines; this is why we need technocrats doing the negotiations not old politicians like Shamenda,dull Kambwili and Yaluma..again we have been hoodwinked.

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  6. Comment: Glencore are Another lungu’s chatterbox of the day. Even after we will be employed by this damn pf project, we wil not vote for it period because the pf are just a group of failed up dogs tryng to hoodwink our votes especially here in the coperbelt. It wil be a flow of another ‘donchi kubeba’ as we are trying HH this time period! Forget about CB you stu.pid pure fools. From one of the pf branch publicity secretary MJP.

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  7. When we say Zambian economy largely depends on copper export and mining industry this is exactly what we talk about not the pf govt. We have seen investment in the same industry in countries on civil wars like drc. In short an investor sometimes overlooks the environment of they really means business.
    An expert liar has been people that the economy is underperforming because of Pf. Just wait when copper price picks and electricity projects are completed coupled with diversification in agriculture how the economy will grow.

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  8. BUT WHY SHOULD IT ALWAYS BE COPPER? 50 YEARS SAME THING. WE BORROW MONEY PUT IT IN ZAMBIA RAILWAYS, WHAT DO WE GET, COURT CASES, RESIGNATIONS AND SCANDALS.

    KATWISHI MWE, AND WE HAVE PROMINENT ECONOMISTS IN LUSAKA, KUWAYAWAYA FYE MWE.

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  9. kasanga I agree with you.1 KINGS 3 vs. 5 the lord appeared to him {Solomon (Lungu)} in the dream and asked him; what would you like me to give you? Vs 9 give me wisdom to rule your pipo (Zambians). The lord was pleased that Solomon ( Lungu)had not asked for riches (like HH and GBM) I will do what you have asked for I will give you what you have asked for. Chapter 5 Solomon (Lungu) prepares to build the Temple. Come August 11 Solomon (Lungu) as indicated in chapter 6 is coming to build the Temple. Solomon’s enemy starts with HA (1 Kings 11:14-16) and lungu’s enemy starts with HA. Will the Edomites (UPND and their leader win?)

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    • Why are you quoting fiction…in third person…ask yourself who is this observer who seem to have seen all this?
      Wake up…study about self!!

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  10. Comment:the health professionals council is failing to provide practising licences to applicants because they have misused the money. This is after increasing the fees by 250%.

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  11. REGIONALISTS WILL GNASH THEIR TEETH ON. 13 AUGUST 2016.
    EDGAR WILL GO THROUGH AT THE FIRST BALLOT AND TOGETHER WITH THE DEVIL INCARNATE MMEMBE THEY WIII CRY FOUL.
    TODAY THE DOLLAR IS BELOW 10 KWACHA.
    NEXT WEEK EVEN LOWER.
    HAVE A GOOD DAY.

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  12. Don’t celebrate, please. Zambia is the only known country in the world which gets a song for her resources. I don’t know how many times the windfall tax has been revised for worse rates, VAT refunds being reimbursed at Foreign Investors’ word of mouth, no invoice to show. Are we going to get what we deserve out of this deal? Just like most students are comfortable with a mere pass mark of 40% in an exam or compensatory mark, Zambian successful govts are very comfortable of loans and donations instead of getting returns on their resources which give birth to these loans and donations & are negotiated at a song. All Zambian foreign based footballers are contracted on a song. Any investment without ordinary citizens’ involvement is mockery of the day.

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  13. The devil worshipers on this forum are not happy of this good news about our lovely country – Zambia. Their hard heart leader hardly smiles and I would not be surprised if he is angry with this good news. According to the cartel newspaper (Post), the kwacha is gaining strength against major currencies. Load shedding is on the decline and mealie meal supplies on the increase. HH treats women and girls as second-class citizens, that’s why his party would rather have a man without basic education(GBM) as its vice President.

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  14. When Moody says something real and negative , the PF says .mfyo mfyo mfyo! Now you are saying mfyo mfyo mfyo bafikala, you failed to run government!

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  15. When we add up figures from the mines in North Western Province it is almost 60% of production comes from this province but look at what the government gives to the province in the province.
    People from North western let us share this information and take it and explain to all the people so that we can determine our next course of action as this is day like robbery.

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  16. “Glencore’s investment will REDUCE PRODUCTION COSTS and INCREASE the EFFICIENCY and PROFITABILITY of Mopani’s copper mine shafts” = less jobs and NOT more jobs…!

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    • These people don’t understand this language about efficiency…you are wasting your time.. its like speaking in gibberish to them…tell them in Europe a road can be constructed with a gang of 10 multi-skilled labourers instead of 50 casual workers and 5 drivers..they think you telling lies.

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  17. Copper prices are slowly picking up. today the exchange rate is k9.7 per dollar. is it pf or global factor which pushed our economy to the conner? lets make informed decisions.not just following our collegues who may test sugar and up saying it is bitter.

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  18. The fake Dr Neo Simutanyi just talked about a non existent dissatisfaction within PF but he did not talk about the looming dissatisfaction or split within UPND and their vice presidents which will be caused by the appointment of HH’s running mate.

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  19. The truth is God answers prayer, when we prayed you laughed at us now you can see that , prayer change things.
    When you cry to God especially prayer lead by president is a prayer from the heart .
    God saw we need him but Satan laughed. Now Satan is crying as his demise is near evil can not win over our God.
    Now it is not time to go to sleep but to honour God even more

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  20. Very good news indeed especially with the dollar below 10 wina hazalila hagain.

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  21. productivity is the ratio of output to the input. Balancing effectiveness and efficiency in resource utilization lead to an increase in production,when a company” break – even” its able to purchase new equipment and materials as such labor must also increase as a variable factor of production which in turn result in employment creation.

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