China Putting $700 Million into Booming and Busting Zambian Copper Production

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Researched by Industrial Info Resources (Sugar Land, Texas). The China-Africa Summit in Beijing during the first week of November produced signed contracts with eleven different African countries for minerals and infrastructure projects worth $1.9 billion with the prospect of more mega-Afro-Sino projects coming down the pipeline.

China Non-Ferrous Metals Mining (CNMC) company has focused on the Zambian town of Chambishi on the Copper Belt region in the north of the country where it will invest $500 million over three years to construct a non-ferrous industrial zone. An initial agreement has been signed for this project between Zambia and China.

Work has already started on the Chambishi site on a $220 million smelter for which a Memorandum of Understanding (MoU) was signed in Beijing between Zambia’s Minister of Foreign Affairs Mundia Skatana and state-owned CNMC’s president Luo Tao. The smelter will have an annual production capacity of 150,000 tons of blister copper per annum when it goes into full operation at the end of 2008. This could bring Zambia’s annual output to 800,000 tons per annum (tpa) with one million tpa targeted for 2010. The new plant will create 1,000 new jobs and increase Zambia’s exports by $450 million.

CNMC currently operates a 65,000 tpa copper concentrate company at Chambishi, which started operations in 2003, and in September of this year, a $12 million leach and acid plant with an annual copper production capacity of 10,000 tons was commissioned.

Meanwhile, Zambia’s largest copper mine Konkola, controlled by India’s largest producer of copper and zinc, Vedanta Resources (NYSE:VDNRF (London, United Kingdom), has had to close its leach plant and is in danger of missing the 200,000 tons of finished copper it targeted to produce in 2006. The closure followed after a dam spill into the Chingola River, which could have put local communities and their water at risk. Water supply firms have cut supplies to 50,000 residents in the area who have been without water for more than three days. The state’s Ministry of Environment and Natural Resources is ensuring specific conditions before operations can resume.

Zambia’s copper plants have been running on the ragged edge of capacity for some months as ways have been sought to increase production to feed high demand and high prices on the international market, driven by Chinese demand.

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