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Zambians toast year-end ‘economic miracle’

Zambians from all sides of the economic divide are congr atulating themselves on what they see as a miraculous recovery of the mining sec t or, which at the beginning of this year was threatened by total collapse.

Indeed, from the dire gloom of the start of the year the picture has dramaticall y changed for the Zambian mining sector. Prices of the lifeline metal – copper – have gone up from the low of US$2,811 per ton in the first quarter of 2 009 to a high of about US$8,000 and it is still rising. In July 2008 copper prices were at US$8, 985 a ton.

The dreaded, widespread and massive redundancies in the mining sector have been capped and with the help of massive investment from China, the Zambian mines are beginning to employ again. Altogether the Zambian Governme nt officially estimates it had lost more than 8,500 jobs in the mining sector alone.

“But over 1, 500 have been regained since then,” according to finance and nation al planning minister Situmbeko Musokotwane.

But the International Labour Organization (ILO) and local economic think-tanks e stimate that about 18,000 jobs were lost from the mining sector alone at the height of the global economic meltdown, directly from the mining se ctor and other related units.

ILO country representative Derrick Finnegan explained that the UN agency’s figur es were higher than those of the government because they included job losses that were recorded among companies that were contracted by the mining companies to perform certain mining-related tasks such as the building of infrastructure and supply of mining components and equipment.

Much of the recovery in the Zambian mining sector is directly attributable to Ch inese investment, through China Non-Ferrous Metals Corporation, that rescued Luanshya Copper Mine – Zambia’s oldest copper mine – and saved in excess of 3,00 0 jobs at this single copper mine.

It is also Chinese investment that bailed out Munali Nickel Mine, about 200 kilo metres south of Lusaka, to re-absorb workers that had already been declared redundant by the Australian company (Albidon) that started the mining operation.

Chinese investors are also poised to inject a further US$3.6 billion in the Zamb ian economy, specifically into mineral explorations and mine developments in the North-Western region of the country.

Zambia Development Agency estimates that Chinese investment has generally create d more than 15,000 new jobs in the national economy from its investment of more than US$2.6 billion in the copper mining sector directly and also in other sectors such as retail, farming, medical care and manufacturing.

With the miraculous turnaround of the mining sector, Zambia is now optimistic th at she can attain a growth rate of 6.3 percent and an annual inflation rate of about 10 percent.

Bank of Zambia governor Caleb Fundanga reveals that as a result of the economic hardships experienced at the start of the year, earnings from copper are expecte d

to decline by about 18 percent to stand at US$2.9 billion, compared to US$3.6 bi llion recorded last year.

This is in spite of the fact that Zambia’s copper production has gone up from 45 0,000 metric tons last year to the historic 2009 figure of 576,000 metric tons.

“Copper production has gone up by 20 percent and by end of December we were expe cting a further addition of 13 percent,” Fundanga said.

The Central Statistical Office of the Zambian Government has consistently mainta ined in the last quarter of this year that Zambia will attain a 6.3 percent GDP (Gross Domestic Product) Growth rate by the end of 2009.

In his 2010 budget address, delivered in parliament last October, Finance and Na tional Planning Minister Musokotwane reported that this growth rate is far above the 4.3 percent that was projected for 2009 at the start of the year.

“Compared to the global growth estimates of negative 1.1 percent and Sub-Saharan Africa growth projections of 1.3 percent indicated earlier, even the harshest critic will find it difficult not to admire this government’s commendable achiev ement,” Musokotwane declared.

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