More Chinese companies invest in Zambia's mining sector

Zambia, the world's fourth largest copper producer and second largest cobalt producer, has seen more Chinese investors in the mining sector in recent years.

Zhang Shudong, the commercial counselor at the Chinese Embassy in Lusaka, told Xinhua that there are currently seven Chinese companies engaged in mining industry in Zambia, with a total investment of nearly 170 million US dollars.

Chambeshi copper mine in the Copperbelt Province is the first mining project invested by Chinese companies, in fact, it is the first ever overseas investment in non-ferrous metal mining by Chinese companies.

The mine, abandoned in 1988, was bought by China Non-Ferrous Metal Industries Corporation in 1998 at about 20 million dollars. econstruction formally began in 2000.

Three years later, on July 28, 2003, the mine was officially reopened by Zambian President Levy Mwanawasa, 16 years after it was left in desolation.

The mine, run by NFC Africa Mining Plc., produced 50,000 tons of copper concentrates in 2004 from 800,000 tons of ores.

Tao Xinghu, the general manager, said his company has so far invested over 150 million dollars into the mine.

In November 2004, the company began to construct a leaching plant at a cost of 15 million dollars. Its completion will enable Chambeshi mine to refine its own ores instead of selling it to other refineries.

Collum Coal Mining Industries Ltd. is a private firm based in Choma, Southern Province. It started production in 2003 and recorded an output of 20,000 tons in 2004.

The company's general manager, Xu Jianxue, said the company plans to increase its production to over 100,000 tons in 2005.

To meet increasing demand in the market, Xu said the company is in the process of opening a second shaft. When the project is completed, the mine will double its annual production to 200,000 tons, making it the biggest coal mine in Zambia.

Chiman, a private firm from China's Liaoning Province, is in the process of developing a manganese mine in Zambia's old industrial town Kabwe. The mine has a proven deposit of 4 million tons.

According to company sources, the investor has completed the corporation registration process while various equipment have started arriving in. Operation is expected to formally start within the year.

Zhang said China's investment in mining sector is a win-win situation for both countries. For China, the country's fast growing economy has driven up demands for various minerals sources.For Zambia, such investments have contributed to economic development and job creation.

Mining is Zambia's main economic department. Copper export is the country's largest single hard currency earner.

Zambia's copper production reached its highest in the 1970s, with an annual production exceeding 700,000 tons. Production declined to the lowest of less than 300,000 tons by the end of 1990s.

With new investments from China, Australia, Canada and other countries, Zambia's copper production increased to 410,000 tons in 2004. The southern African country aims to further increase its production to over 700,000 tons in two or three years.

Chinese investment also created new jobs which is key to poverty reduction. The Chambeshi mine alone is employing nearly 2,000 Zambians. Many Chinese investors interviewed by Xinhua urged the Zambian government to further improve its investment environment.

The Zambian government's rigid control over expatriate staff, high transportation costs due to its landlocked position and poor infrastructure, discriminative incentives, complicated labor relations laws and frequent strikes by workers, and poor local industries are not helping investors, they said.

The investors also called for greater support from the Chinese government and the banking sector so that more Chinese investors could tap the rich minerals resources in Zambia and expand their business.

Source: Xinhua