The New Dawn Government led by President Hakainde Hichilema should ensure there are practical steps taken for the country to be able to meet the 3 million tonnes annual copper production target, a Lusaka based financial analyst has cautioned.
Finance Minister Situmbeko Musokotwane when appointed to revealed that the New dawn Government would embark on an aggressive economic reform programme for the country with the aim to record production of 3 million metric tonnes of copper per year within the first term of office, a move that is expected to deliver elevated economic activities, bring in more forex and generate additional employment opportunities.
Financial analyst Maambo Hamaundu said Government should first start by asking why the mining companies were not able to accomplish this 3 million tonnes production levels now and then take practical steps towards achieving the pronouncement.
Hamaundu told the Zambian Business Times – ZBT in an exclusive interview that achieving the set 3 million tons of annual copper production target by the government would put Zambia in a very good strategic position especially with the rising copper prices on the London Metal Exchange (LME).
“The minister of finance in one of his pronouncements did indicate to say he wants to see an improvement in the mining sector in terms of production. Our production of copper now is around 850 000 tonnes per year, he is pushing to say we could go to 3 million tonnes per annum.
“If we accomplish that and with the projections that the copper prices are likely to stay up and might even higher than where it is now, it could even reach US$15, 000 per tonne, then Zambia is sitting in a very good position, we might see the benefits of higher copper production trickling down into Zambia .
“But all this will be centered around management, yes we can pronounce to say we want to go to 3 million tonnes but we need to ensure that there are practical steps that are being taken,” he said.
Hamaundu further said “we need to ask ourselves, why are we not accomplishing that 3 million tonnes production now? What challenges is the mining sector facing? Are the mines deliberately not just mining because they are perhaps demotivated because of the current tax laws or is it that they do not have sufficient electricity to help them mine?.
He said all those questions have to be asked and answers or solutions identified on what needs to be done to ensure the country meets the target it’s aiming at. Hamaundu said ultimately if copper production improves, the ultimate and bigger beneficiaries will be the Zambian people.
“Ofcourse the business owners will also benefit but the biggest beneficiaries will be the Zambian people because a number of jobs will be created in the process, we will have high tax revenues to meet the social services and other needs for the country. That is the position we are in as a country at the moment,” he explained.
The challenge has always been on how to strike a balance between the mining companies interests and the country’s interests and agreeing on predictable and long term taxation that is equitable for the key stakeholders. It remains to be seen how the new government will handle these very complex negotiations.
