GOVERNMENT says it is engaging mining companies to consider different options so that the two parties could come up with consistent and predictable policies for the mining sector.

And mining houses in Zambia have hailed the Zambian Government for its continued commitment to finding lasting solutions facing the sector.

Gemfields Plc, 75% owners of Kagem Mine, and Vedanta Resources Plc, owners of Konkola Copper Mines (KCM) have said that they appreciated the openness with which Government was approaching the various efforts that have been tabled so far in order for the parties to arrive at a mutually beneficial set of policies.

Vedanta Resources Plc Chief Executive Officer, Mr. Tom Albanese, said during a ‘Country Case Study’ on Zambia at the on-going Mining Conference in Cape Town today that his company was proud of what the negotiating team had achieved with the Zambian Government in getting round the challenges facing the sector.

He said KCM respected the “owners of the resources in Zambia” because they realised the pivotal role that the company played in the lives of Zambians.

Germfields Plc Chief Executive Officer, Mr. Ian Harebottle said his company had all the confidence in the Zambian Government which had continued making the country “an excellent investment destination.”

The two were part of a panel discussion which also comprised Zambia’s Minister of Mines and Minerals Development Mr. Christopher Yaluma, Deputy Finance Minister Mr. Christopher Mvunga and ZCCM-IH Holdings Chief Executive Officer Dr. Pius Kasolo.

The session was also attended by Deputy Minister for Mines and Minerals Development Mr. Richard Musukwa, Zambia’s High Commissioner to South Africa His Excellency Mr. Emmanuel Mwamba, several multi-national mining investors, and business executives from various sectors.

And Mr. Albanese disclosed that KCM has made tremendous progress in repositioning itself in the last two years and could comfortably say that it was now able to withstand the current low copper prices.

“We are hopeful that there will be positive trends soon and the copper business will start coming round this year although this will not be in the range of 6 to US$8, 000 per tonne.”

He said Vedanta Resources understood the current problems, such as the energy shortage, that the Zambian Government was grappling with and would like to be part of the solutions.

On the developing consistent policies to guide the mining sector, Mr. Mvunga said Government was alive to the fact that mining was a long term investment for which owners needed to be able to plan ahead without difficulties.

“We are in constant dialogue with the mines to arrive at a consistent and predictable tax regime. We realise that there is need for a certain form of certainty as these are long term investments,” he said.

Mr. Mvunga said Government, just like many other players in the sector, realised that mining had moments of “troughs and crests”. He said Government was glad that there was still a show of optimism from the mining houses themselves.

He reminded mining companies to look at the ‘Remission rule’ governing the operations of mines in Zambia so that they could put it to use in troubled times as the current scenario.

Dr. Kasolo pointed out that trends in the mining business were of cyclical nature and that these occurrences were beyond the control of any government.

And responding to a question from the audience, Mr. Yaluma assured the mining sector that Government was not considering reintroduction of the Windfall Tax until such a time when conditions dictated so.

Mr. Yaluma said Zambia had been through a period of depressed metal prices and that Government was confident that the country would emerge out of the current one victoriously.

He said Government, the industry and all other stakeholders had their roles to play in order to reverse the downturn.
The Minister told the audience that in order to ensure growth and sustainability of the mining industry during all financial scenarios, a clear and articulate policy that sought to create a competitive, thriving and sustainable mining industry had been adopted.

Mr. Yaluma noted that Government had also adopted the revised Mines and Minerals Development Act of 2015 which was enacted to bring the law in line with international best practices.

The new law addresses among other things; the unnecessary bureaucracy in the issuance of mining rights; inadequate tenure of mineral processing licences; Mineral royalty rates, and promoting good governance, transparency, adherence to the rule of law and regular dialogue with stakeholders.

Source: Lusaka Times

Plunging copper prices have pushed the copper industry into a quandary, with global demand deteriorating to an even worse extent than many people realise, Bernstein senior research analyst Paul Gait told delegates at the 2016 Investing in African Mining Indaba this week.

Gait noted, however, that copper was fundamentally scarce in an economic sense, as it was becoming harder to explore for copper and develop a mine. “The average lead time in finding copper is 30 years. It used to take 10 to 15 years. Copper mining is getting harder, not easier,” he stated. He said the dramatic increase in mining productivity seen in the 1970s to the 1990s had run its course, as it was getting increasingly hard to overcome the effects of geological complexity.

He added that it was unlikely that the copper industry would see a repeat of either the US in the early 1900s or Chile in the 1970s – the golden eras for copper exploration. “Grade declines are a fact of life, yet demand will continue to grow.” ZCCM Investment Holdings CEO Pius Chilufya Kasolo, meanwhile, pointed out that most of the mines in Zambia were not making money.

The Zambia economy, which has relied heavily on the copper industry over the years, is facing turbulent times, as its currency, the kwacha, has tumbled in tune with the problems experienced in the copper industry. But Kasolo said he feared that putting a hold on copper exploration because of a need to save money, could count against Zambia in the long run. “With a shortage of copper, the price may go up and the guys will wake up and it will be too late.” Gait concurred.

“At the moment the problem is oversupply but we know that oversupply will unwind itself.” Panelists participating in a special session on Africa’s Copper Potential suggested that South America may be a more abundant region for copper reserves than Africa; however, Kasolo believed “the last frontier for copper is in Africa”.

“I hear reports that only 20% of the world’s copper is in Africa, but I think there’s far more. Apart from Zambia, there’s more in the Democratic Republic of Congo.” Kasolo said the problem in Zambia was that the cost or production was high, owing to Zambia being a landlocked country and electricity supply challenges. Zambia has been struggling with electricity shortages, owing to the impact of a drought on hydropower plants.

Source: Mining News Zambia

Anglo American CEO Mark Cutifani expected 2016 to be the most challenging year for the mining industry, stressing in a copy of a speech delivered at the Investing in Africa Mining Indaba, in Cape Town, on Monday, that things could get worse before getting better.

He noted that the depth and length of the commodity downturn was forcing mining companies to look at themselves in a different light and to respond accordingly.

He added that the mining industry had itself to blame for the oversupply in the market and cautioned that miners should not rely on a reversal of the commodities price slump anytime soon.

“Adjusting supply to align with decreasing demand growth may not make sense as companies seek to maintain market share and drive competitors out of business. This strategy generally has a net negative effect,” he said.

He stated that Anglo would exit a number of its mines in several countries around the world this year to ensure the company was able to retain its long-term competitive edge and build a more resilient investment platform.

“Transforming the operational performance of the company, while also taking the hard but necessary choices about some of our assets, has been an essential part of turning around the ship in what I have always said would be a five-year exercise,” he said.

Meanwhile, Cutifani stated that South Africa, like many other countries, was experiencing the fall-out from the global economic pressures and the effects of the downturn in commodity markets.

However, he lauded the South African mining industry for putting its weight behind government’s Opertion Phakisa initiative, showing an appreciation for government’s recognition of what needed to be tackled urgently – from broadband constraints, to agricultural reform, to the competitiveness of the mining industry – “it is a global market, not only for mining, and South Africa must be in a position to compete.”

Source: Mining News Zambia