AfDB President Sees Impact of Financial Crisis in Zambia
The African Development Bank (AfDB) President, Donald Kaberuka, who arrived in Zambia on April 4, 2009, to attend a two-day COMESA-EAC-SADC high-level consultative meeting on the North-South Corridor visited two copper mines in the northern copperbelt region of Zambia. The mines - Luanshya and Mufulira - are located some 350km north of the capital, Lusaka. The rapid fall in international commodity prices over the last 5 months has adversely affected Zambia’s foreign earnings receipts which are heavily depended on copper exports. As a response to declining commodity prices, two major mines have closed operations while others have scaled down significantly.
Management of both mines visited by the AfDB President informed him that as a response to current low international copper prices on the global market, the companies have been forced to significantly scale down their operations. This has, in turn, led to cut-backs in employment. Luanshya, which is the most affected mine, halted operations in December 2008 and is currently on care and maintenance, and up to 2,000 of its workforce has been laid off. At the Mufulira mine, a total of 1,000 employees have been laid off with another 6,000 contractors losing their jobs.
Mr. Kaberuka was informed that while current low copper prices had affected earnings, local factors such as high taxes and inflation had also impacted negatively on mine’ operations. Speaking during the visit, Mr. Kaberuka expressed his appreciation for the opportunity to see first-hand the effects of low commodity prices and the global financial crunch on mineral-dependant countries such as Zambia.