Emeralds and Semi-Precious Stones Mining Association of Zambia-ESMAZ has disclosed that the mining sector is expected to attract low investment this year due to the high cost of fuel.
Association President Victor Kalesha said the increase in fuel prices would reduce the number of investors willing to invest in the mining sector because mining is a high cost venture and an increase in fuel prices will result in the high cost of production.
Speaking in an exclusive interview with the Zambian Business Times-ZBT, Kalesha said artisanal small-scale miners and other small-scale miners were hoping that the mining sector would receive a number of investors this year due to the change of government as they assumed that investors would want to work with the new government but that is not the case.
Kalesha also noted that the production levels of big mining companies like Grizzly Mining and Kagem Mining will be affected as the cost of fuel is too high for production adding that large-scale mines like Grizzly Mining and Kagem Mining spend not less than US$3 million dollars per month on operation costs.
He added that mining depends on the use of fuel equipment and there is no other alternative that mining firms can adopt to maintain high production levels in the midst of high fuel prices.
Kalesha explained that the fuel price increase might also result in the reduction of labour as most companies might feel they are incurring too many costs and might want to cut on the labour in order to cut out some costs.
“The increase in fuel prices might also affect the salary increment of mine workers as there will be too many costs going into the operations while having less production. It will also affect social responsibilities because it will be very difficult for companies that are in operation and production to settle for certain social responsibility ventures”, he said.
He hopes that the war in Ukraine and Russia would be resolved soon so that things can go back to normal and mining firms can operate on normal levels.
