Copper production in Zambia has recorded a sharp decline. Zambia Chamber of Mines released statistics showing production dropped 7.4% year-on-year in the first half of 2022 to 364,089 mt.
“So far half a year has passed, while the Zambian government’s target of producing 1.3 million mt of copper in 2022 appears unattainable. The Zambian government has provided tax incentives to mining companies this year as well as improving the overall operating environment, but the copper production still fell steeply in the first half of the year,” Ridle Markus, an analyst from Absa Group, said.
Decreasing output
Both two mines of First Quantum Minerals Ltd. in Zambia saw decreasing output in the second quarter due to enduring rains and COVID-19 restrictions. The output of the two mines combined accounted for more than half of Zambia’s total output.
Should mining companies not take measure to reverse the downward trend of production, Zambia’s annual copper output is likely to fall for a second straight year, even after the copper prices rose to a record high in March. The government aims to increase the copper production to 2 million mt by 2026 and 3 million mt by 2031. To that end, the government is negotiating with Zambia’s creditors to restructure the external debts that have amounted to $17.3 billion, the payments for which mainly come from copper export earnings.
The Ministry of Finance and the Ministry of National Planning of Zambia predicted in July that the country’s copper production this year would increase to 833,480 mt from 802,967 mt in 2021. The mid-term budget plan also revealed that the production goal stands at 986,902 mt by 2025. Zambia’s copper exports fell 8.4% in June from the previous month, according to official statistics.
