By Amb. Emmanuel Mwamba
There is a low-intensity debate on the future of mining in Zambia.
Despite her rich mineral endowments; copper, cobalt, gold, emerald, and other minerals being mined in large quantities every year, there are little financial returns to Zambia.
COPPER & COBALT MINES
For the first time in 30 years, the Zambian government wholly owns some of the largest mines; Konkola Copper Mines and Mopani Copper Mines.
Given the economic value the mines have for Zambia, even before they are fully exploited, the direction taken to sell them to foreign entities may be careless.
COBALT PRICES
Currently, cobalt prices on the world market are trading at US$70,954 a tonne.
The gray metal, typically extracted from copper deposits, has historically been of secondary interest to miners.
But demand has exploded worldwide because cobalt is used in electric-car batteries, helping them run longer without a charge.
Zambia is not benefitting much from this price boom due to low production (or declared production) of the metal.
According to mineral production figures obtained from the Ministry of Mines and Minerals Development, the country’s cobalt production stood at a paltry 287.19 metric tonnes in 2020 compared to the production of 367.281 metric tonnes in 2019.
The leading country in worldwide cobalt mine production in 2020 was Democratic Republic of Congo, having produced an estimated 95,000 metric tonnes.
And copper prices have hit the highest peak in 20 years trading at about $9,500 – $10,000 per tonnes.
As a country, and especially for our new economic managers, we must embrace and hold onto the mines the way a drowning man clutches to a straw.
Any consideration for an equity partner must favour Zambia than previous hollow exploitative partnerships we have seen in the past.
ZAMBIA´S COPPER MINES A GLIMPSE
Zambia is Africa´s second largest copper producer churning out about 850,000 metric tonnes of copper annually which is loaded on trucks and later shipped abroad to destinations such as China in raw form-a tragedy.
It is another tragedy to sell our copper and cobalt cheaply as a raw material overseas and get pocket change through our minority shareholding in the various mining entities currently dominated by foreign companies based in UK and Canada such as FQM and Barrick Gold to mention but a few.
Especially now when the industrialised West and East are working at doing away with fossil fuels to ramp up the manufacturing of Electric Vehicles, so called EVs that are environmentally friendly and easy to maintain.
ELECTRIC VEHICLES: THE GOOSE THAT LAYS THE GOLDEN EGG
The EV industry is a growing and booming industry which promises to make several countries such as Zambia extremely wealthy in a few years to come once properly harnessed.
A recent Allied Market Report, which studies the industry, shows that the global value of the EV industry will stand at about US$803 billion annually by 2027, as the demand for the new transport mode peaks.
From that figure you can see that, it makes more economic sense for Zambia to keep its copper mines, dig new ones and or increase ownership in existing mines.
This is not the time to sell whatever mine you have as a country.
Seventy (70) per cent of the components that are used to make an EV, whether hybrid or plugged in come from copper and cobalt, the majority of which are buried in Zambia.
Conventional vehicles you and I use that run on gasoline or petrol are being phased out because that form of energy is not renewable and contributes to environmental degradation compared to electric vehicles.
Zambia with its massive copper deposits and cobalt must now court motor vehicle companies in Europe such as VW, BMW and Tesla to do the following:
- Set up factories in Zambia in industrial parks around the country and add value to copper and cobalt and other minerals in partnership with the car companies, stop exporting raw copper
- Partner with EV companies to train and employ Zambians in adding value to copper in the factories they will set up in Zambia
- Stop discussing plans to ever sell off our mining companies to foreign entities because that is day-light robbery that only makes us poor.
- Zambia must start thinking BIG instead of selling off the mines just because someone will get a kick back or already got a kick back in one form or another.
- Create thousands of jobs through EV industrial parks and not sale the national treasure.
CONCLUSION
We have made bad economic decisions in the past but we now have an opportunity to correct them instead of digging one loss making pit to fill in another.
We need to learn from the past.
In the 1980s, the state-owned mines with lack of investment, deteriorating efficiency of operations, and unsound economic decisions, combined with low prices, brought both Zambia’s national mining companies to the brink of collapse.
When the mines were privatized in the 2000s, little benefits came to Zambia as unfair mining agreements, lack of transparency and cheating plagued the industry.
Let’s stop the toxic and lazy talk of selling mines and instead invest in or seek profitable partnerships for our people.