from ARNOLD MULENGA in Lusaka, Zambia
LUSAKA, (CAJ News) – A RALLY in the price of copper globally is a major boost for Zambia in its efforts to revive the economy impacted by the coronavirus (COVID-19) and drought.
The sharp recovery in the price of the commodity has been on the back of United States policy expectations as the new administration of president-elect, Joe Biden, assumes office.
The administration has announced an aggressive fiscal stimulus package.
Copper prices are up to more than US$7,95 per tonne, having already gained 2,42 percent for the year.
Rand Merchant Bank (RMB) concurred with market sentiments that prices were expected to climb with potential scenarios similar to the global financial crisis where prices climbed to over $9 000/tonne.
“Such moves would greatly benefit environments like Zambia that need to beef up their reserve base as part of their economic recovery plan targets,” RMB experts, Daniel Kavishe and Neville Mandimika, stated.
Zambia is Africa’s second-largest producer of copper, after the Democratic Republic of Congo.
In 2020, it produced more than 646 000 tonnes of the metal in the first nine months of 2020, up from 590,321 tonnes in the same period last year
Copper mining is central to the economic prospects for the Southern African country and covers more than 80 percent of all exports.
On Tuesday, Glencore, the Anglo-Swiss firm, confirmed the sale of its 73 percent stake in Mopani Copper Mines to Zambia Consolidated Copper Mines (ZCCM).
Kavishe and Mandimika gave the transaction a thumbs-up.
“Our current analysis suggests that an increased stake in the mine would enable the Zambian government to benefit from higher dividend pay-outs in future,” the RMB experts stated.
– CAJ News