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Monday, September 19, 2022

Zambia has lost the number one copper exporter hegemony to DRC

Columns Zambia has lost the number one copper exporter hegemony to DRC

By Edward Chisanga

It began with whispers, speculation and gossip, that Zambia was losing global competitiveness of exports of copper to DRC. That speculation has transmogrified into reality. I’m no expert on copper production processes and quantities. Others are. On September 8, I read an article by Chimwemwe Mwanza, “DRC is now the continent’s biggest copper producing nation by volume.” And I’m sure there’re other experts and even national statistics confirming and converting the speculation into facts.

As my expertise is limited to global, regional and bilateral trade, I compliment Chimwemwe’s excellent revelation with what I know about the two countries’ competitive rivalry for continental hegemony in exports of the same. Using Unctadstat data, I confirm that DRC has overtaken Zambia in global exports of copper as shown in Figure 1 below. It’s simple logic: DRC is producing more, therefore, it is exporting more given that the product is produced largely for export.

A decade ago, Zambia led DRC in exports of copper to the world by wide absolute values. For example, when Zambia exported about $7 billion in 2014, shown in Figure 1 below, DRC exported less than $2 billion. The significant shift began in 2018 when DRC assumed control with Zambia trailing behind for the first time in the last fifteen years, the period I’m aware of. Why this happened is a question for new leaders to answer and reverse. We can mix with DRC but we must not forget about global and even regional competitiveness and why outcompeting others must be Zambia’s objective number one.

Export markets are mainly in Asia and Europe

The main export markets for the two neighboring competitors are mainly Asia and Europe as shown in Table 1 below. In 2021, DRC exported copper worth $7.7 billion to Asia compared to Zambia’s $4.0 billion. While Europe continues to be Zambia’s key market, it is not for DRC. Equally, while Africa remains a significant market for DRC, for Zambia, it is not.

Table 1: DRC/Zambia’s global export markets of copper in $millions

 2021

DRC

Zambia

World

10,066

8,233

Africa

1,611

272

Americas

208

30

Asia

7,702

4,093

Europe

546

3,838

Source: Unctadstat

But who dominates world exports of copper?

The myth by many Zambians may be that Africa is the largest exporter of copper beating Chile. At school, I learnt about only Chile and Zambia as major producers and exporters. Even prior to writing this article, this week, my perception was the same as is for many Zambians who think that Zambia is one of the largest producers and exporters. Amazingly, statistics show unsung heroes like Asia, Europe and Americas shown in Figure 2 below with Africa at the bottom with only US$24 billion exports, largely coming from DRC and Zambia.

Concluding

Indeed, the repeated song, “We have many natural resources to develop from, from within Zambia or Africa” is being challenged by these statistics showing strong competition of ownership of copper. The many countries in Asia producing copper make it competitively difficult for African countries like Zambia and DRC to impose policies to foreign investors. What happens when you impose and they go to Asia? Finally, one hopes that with improved policies and hard work, Zambia will soon recapture its hegemony in the production and export of copper from DRC. It’s mind-boggling to understand how Zambia surrendered its supremacy.

30 COMMENTS

  1. This is just the beginning…just wait til IMF is done with Zambia…there will be no copper left …meanwhile South Africa is in the dark no Electricity…..this is what happens when corruption gets out of hand and you busy making deals with white Cartels…bazungu wants to buy ESKOM for peanuts and soon they’re coming for ZESCO

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    • Igniting sentiment on who produces more copper than the other makes this article a waste of time. Zambia and Congo have been exchanging continental top slot for copper exports from independence if not before that. If the writer wants to steer a more progressive agenda he should discuss who beneficiates this mineral better than the other. Then these two governments can be directed towards creating beneficiation industries around their core product. They would not only earn more from the mineral they would create jobs from the more diverse industries.

  2. That isn’t a statistic to lament about. Our thrust should be to be a leading exporter of copper products. We need more copper processing plants and it’s good that Neelkant had joined ZAMEFA in the electric cable manufacture but we need to go further than that. By the way, does the DRC own that copper? They don’t just like we don’t as well.

  3. Just pay attention what’s happening in South Africa….the next Zimbabwe…and watch what will happen to Zambia …South Africa has a Western World puppet Ramaphosa in office and Zambia has chief Western world puppet in office HH…….Our natural resources will be looted freely and ZESCO will end up in the hands of bazungu…remember what happened to ZAMTEL…..I applied for 3 phase underground electricity connection and ZESCO is not giving me any quotation apparently they’re waiting for IMF to give them the new tariffs and completely remove all subsidies

    3
    2
    • All this is because we Africans are not able to manage our people let alone our natural resources
      Including our own homes

    • How did you apply for a 3 phase electrical connection when you live in the US? You keep blaming HH for going to the IMF, please tell us your plan for paying US $30 billion in debt incurred by your tribalist friends in PF in the last 10 years. Under Lungu, Zambia defaulted on this debt. Tell me where you were going to be getting your financing from if you were not going to be able to pay your debts. You do realise that the reason why foreigners gave that Zambia all that debt was to put in a debt trap from which they would demand control of its resources right? Your relatives mortgaged the copper from Northwestern Province to foreigners even before it was dug from the ground

    • So Saulosi, what was your plan with PF had you won these elections to sort out the myriad of problems you created? Coz all I see from you PF chaps is projecting a future of doom and gloom under the same IMF you were pursuing for five years but yet you are offering ZERO alternatives. Would you enlighten us with what PF’s plan was because unfortunately it was not articulated in the campaigns seeing the agenda was just talking about HH.

  4. @4 4ever
    You should be ashamed of yourself to think that you clinched IMF deal….wake up kapala you probably busy wankiiing someone is chewing and looting all your natural resources….do you even have money to buy breakfast this morning

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  5. When you were atop and suddenly you lag behind, it is imperative to look at the reasons for dropping.
    Why has Zambia, once leading copper producer, been overtaken by Congo DR?

    Let’s discuss that.

  6. The reality is that the DRC has much more known copper deposits than us. Once their KAMOA project gets into full production in the next year or two the DRC will be producing possibly double the copper that we produce. Our focus should be to grow our copper volumes and not necessarily brood or worry about what the DRC volumes are and besides DRC are our neighbors and the growth of their economy strengthens ours if we harness the synergies. The myth and lie that we where a global leader in copper production has always been peddled by people with little knowledge of global mineral economics.

    • Another notable advantage DRC has over Zambia is percentages in the quality of copper ore.
      Congo DR has 3% – 4% copper grade, while globally it is in fractions (from 0.6% to 0.8%)

  7. Guess, how much have we lost for not manufacturing electric motors, [ turbines, generators, electric locomotives, electric shovels, tractors, the list is endless].

  8. @ Mulongoti Machayi
    It’s hard to discuss anything constructive when you have people like 4ever who still think a white man is a small god and their savior…look at how they’re celebrating modern day slavery kaloba….since when did nkongole become an achievement…AFRICA WE JOKE TOO MUCH…and South Africa they have whites controlling all their mines….and now they don’t even have electricity…..Lebanon is gone….Srilanka is gone now Zambia has become the latest victim of predator IMF

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    • We can’t undo what is already done. IMF is here to stay and we must live with it for the next 3 years or 10 years (if extend as name implies, ECF). We braved HIPC. We gonna pull through again. Saulosi, the same copper we are discussing here will help us pay our debt with pride.
      ___
      Since 2013, DR Congo has out classed Zambia in copper output. Most investers flock to DRC than they do to Zambia. Why?

    • Thanks Saulosi for your honest observation.
      We can’t undo what is already done. IMF is here to stay and we must live with it for the next 3 years or 10 years (if extend as name implies, ECF). We braved HIPC. We gonna pull through again. Saulosi, the same copper we are discussing here will help us pay our debt with pride.

      Since 2013, DR Congo has out classed Zambia in copper output. Most investers flock to DRC than they do to Zambia.

    • When are you going to stop accusing the white man of your corruptible and backward thinking? In spite of Zambia at one time being the biggest copper producer in Africa, All the billion dollars we owe china, where can we proudly show this is what we did?
      What happened to all the profits? You blame muzungu for destroying your own economy by taking all the loot in offshore accounts.
      Hey, it’s time for a mindset change and to move forward. Blaming muzungu for your own foolishness will not take you anywhere.

  9. 1. Congo has witnessed relative peace of late.

    2. Congo has the lowest cost per production than other nations. Eg in 2013, to produce one ton of copper it would cost:
    $3, 672 in Congo
    $4, 582 in Zambia
    $4, 931 in South Africa

    3. Congo has the highest (quality) copper content of 4%

    Congo deserve the top spot.

  10. Zambia has failed to compete with DRC in part because her two mines have been sent on stretchers off the field of play owing to “Liquidation” and “Nationalisation”. Also, the MRT is said to be too high adding to operational costs.

    KCM remains uncompetitive despite it housing the largest underground mine in Zambia. Liquidation.

    Mopani Copper Mine lacking in recapitalisation has cut short the capacity of its 5 underground mines operations in Mufulira and Kitwe.

    Issues of Value Added Tax, VAT, refunds has been cited to impact on investment. Nationalisation.

    Zambia has had a Mineral Royalty Tax (MRT) of between 5.5% to 10%. The Congolese neighbours are at 2% to 3.5%. Taxation

  11. This is a case of slaves on a ship to the Americas comparing who has the shinest chain…its not like you are benefitting 100% from copper production to keep score cards and please Mr Author if you are going to refer to articles dont use articles by some chap Chimwemwe Mwanza who just sat at home using Google to write his articles.

  12. This is a case of sla ves on a ship to the Americas comparing who has the shinest chain…its not like you are benefitting 100% from copper production to keep score cards and please Mr Author if you are going to refer to articles dont use articles by some chap Chimwemwe Mwanza who just sat at home using Google to write his articles.

  13. This is a case of sla ves on a ship to the Americas comparing who has the shinest chain…its not like you are benefitting 100% from copper production to keep score cards and please Mr Author if you are going to refer to articles dont use articles by some chap Chimwemwe Mwanza who just sat at home using Go ogle to write his articles.

  14. This is a case of sla ves on a ship to the Americas comparing who has the shinest chain…its not like you are benefitting 100% from copper production to keep score cards and please Mr Author if you are going to refer to articles dont use articles by some chap Chimwemwe M wanza who just sat at home using Go ogle to write his articles

  15. What don’t you all admit that over the last 10 years, it was bad government, bad government policies in think they could nationalise and run mines when clearly they could not, putting people in charge who were government lackies and totally incapable of running anything and the biggest thing CORRUPTION.
    Your failures are all home made, nothing to do with foreigners.

  16. I am not a mining expert but I do follow issues on mining with keen interest! As pointed by @Musonda Ndlhovu, DRC has many natural advantages over us! We used to beat them because our country was relatively better managed when the DRC was mired in mismanaged of the mining sector and the nation was held up in spiral of social strife! Otherwise, DRC’s natural resource endowment is way higher than ours! But then we are also well blessed when we look at the average population, surface area and mineral endowment! DRC’s is 3 times the size of Zambia but has the population of about 4.5 times that of Zambia. So even when they can produce double copper than us, we should count our blessing in relative terms and focus on how much value we can derive from what is within our boundaries and STOP…

  17. DRC has commissioned a new mine which has one of the highest ore grade at over 5.0 %. Most of the biggest mining company recently commissioned in Zambia especially in Northwestern are low grades. So the Mine in DRC and the mine in Zambia can treat (Process) the same tonnes of ore but DRC will get more copper than a mining company in Zambia. Below is the company that has boosted copper production in DRC.

    Canadian miner Ivanhoe mines reported yesterday that its Kamoa copper mine in the Democratic Republic of Congo (DRC) achieved a new production record in its first quarter of 2022, recording production of 55,602 tonnes in the period.Kamoa Copper milled 1.08 million ore tonnes during the quarter, at an average feed grade of 5.91% copper.

    The Kamoa-Kakula copper project is a joint…

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