Zambia's copper production will fall by more than 10% this year to its lowest level in 14 years, dealing a major blow to the southern African country's income and economic growth.
The Ministry of Finance and the National Planning Ministry said in a report this week that copper production would fall to 682,431 tons. Copper production accounts for more than 70% of export earnings. That would be the lowest level since 2009 and mark the third consecutive year that production has fallen after peaking in 2020, even as gold prices remain elevated.
The downturn will affect economic growth, which the Finance ministry expects to slow to 2.7 percent this year from 4.7 percent in 2022. In the first half of this year, revenue from mineral royalties was only 23% of the target. It is also another obstacle to the government's ambition to increase annual production to 3 million tonnes by 2031.
The decline in copper production comes as Zambia struggles to restructure its foreign debt since becoming Africa's first pandez-era sovereign default in 2020. Last month, it reached a breakthrough deal with bilateral creditors led by China and France to modify a $6.3 billion loan.
A report released this month by the International Monetary Fund (imf) said weather-related shocks and falling copper revenues, including production shortfalls, were the biggest risks to Zambia's economy. The government of President Hakainde Hichilema has been struggling to find a solution for two large copper mining enterprises after his predecessor clashed with their owners and took them over.
Resolving the problems at Mopani Copper Mines Plc and Vedanta Resources' Konkola Copper Mines, which have been in provisional liquidation for more than four years, could "significantly boost copper and cobalt production," the IMF said. Mopani has struggled since the government bought it from Glencore Plc more than two years ago through a state-controlled company.
Canada's First Quantum Minerals Ltd. accounts for more than half of Zambia's copper production.
Zambia's Ministry of Mines and Mineral Development did not respond to requests for comment.
