Zambia’s economic-growth targets for this year are looking shaky as its copper production plunges along with prices of the metal it relies on for more than 70% of export earnings.
Output fell 7.4% to 364,089 tons in the first half of 2022, data from the Zambia Chamber of Mines showed Tuesday.
Prices for the metal that’s used in everything from automobiles to iPhones are down 20% this year to $7,718 per ton on the London Metal Exchange — well below the Ministry of Finance and National Planning’s July forecast of $9,595 for the year.
The government’s budgeted 3.1% growth target may be under threat, as farm output is also shrinking.
“With half the year gone, the government’s target of 1.3 million tons for 2022 appears unattainable,” Absa Group Ltd. analyst Ridle Markus said in an emailed note Wednesday.
That, along with weaker output expected in the agriculture sector, is likely to further weigh on economic growth he said.
The slump in first-half copper came despite the government giving mining companies tax incentives this year and broadly improving the operating environment.
Output fell at both mines that First Quantum Minerals Ltd. operates in Zambia, which together account for more than half of national production, as prolonged rains and pandemic restrictions curbed output in the second quarter.
Unless mining operators reverse the production drop in the second half, Zambia annual output may slump for a second straight year, even after prices rose to a record $10,674 a ton in March.
The government is targeting to grow production to 2 million tons by 2026 and to 3 million tons by 2031.
The Ministry of Finance and National Planning in July forecast output would grow to 833,480 tons this year from 802,967 tons in 2021.
In the medium-term budget plan, it targets production of 986,902 tons by 2025.
Zambia’s copper export volumes fell 8.4% in June from a month earlier, according to data from the statistics agency.
Since only a small fraction of the copper metal sales proceeds is repatriated to Zambia, what is really the full about the production volumes and copper prices ?!
The Fuss!!
I’m also wondering what the frk* this is all about.
The fuss is 75% of all our foreign exchange receipts come from Copper.
Most people commenting here have no idea about the mining industry. Production is linked to gdp growth as copper accounts for 70% of zambia’s exports.
Can someone explain to me why in 2022 we need to use the London Metal Exchange….Isn’t this a clever form of colonialism 2.0? Are there any preparations to move this function to some place in Africa?
Just as we were cheated through lectures on how to reduce the price of fuel. It has also come to haunt us on the lies on how copper production will rise to 3million tons.
Do not be excited about copper………They are already seriously looking at alternatives to copper in the electric cars. You will be stuck with your copper and sell it at rock bottom prices..
Americans are very clever,. They create a market for what they want to sell. Look at how they have created a market for the arms and other weaponary. They started a war in Ukrain to create a market for their arms. Nancy Pelosi travelled to Taiwan to provoke China so that a war can start and more weapons will be sold. Imwe ati we are peace loving……..Start a war somewhere to sell your copper at good price!!! WAKE UP AND BE CREATIVE MARKETERS . BE LIKE AMERICANS!!!!