Zambia: ADB Private Sector supports Copper Mining - USD 43 million to Lumwana Mining Company Ltd.
Tunis, 27 September 2006 – The Board of Directors of the African Development Bank (AfDB) Group approved in Tunis on Wednesday a loan of US $ 43 million to the Lumwana Mining Company Limited. The project is located in the North western province of Zambia. It involves the development of an opencast mine, the construction of a copper concentrate processing plant, a transmission line from Solwezi to Lumwana, water dam and tailings storage facilities, and associated infrastructure.
The project has a huge development impact. The infrastructure in the North western province, where the project is located is poor and Government –supported facilities are limited and need significant upgrades. The development of the Lumwana project is likely to engender positive socio-cultural and economic impacts in an area, which has so far received little investment. The project represents substantial foreign direct investment in the country and thus will have a positive impact both in terms of employment creation and in terms of contribution to Gross Domestic Product.
The project will generate significant employment of over 1,500 jobs during the construction phase and 1,055 direct jobs during the operating phase. The project will also yield substantial fiscal benefits that will accrue to the Government of the Republic of Zambia through: (i) corporate transaction over the life-of-mine; (ii) taxes on wages and salaries paid to Zambian employees and related industries; (iii) copper production royalties; (iv) power tariffs and other charges and (v) foreign exchange benefits relating to the export of copper.
This is the first mining project financed by the Bank in Zambia under the Private Sector Window. The Bank has, to date approved three private sector projects in Zambia representing a total investment of US$ 17.83 million. The most recent was an equity participation of US$ 5 million to Marasa Holdings for the refurbishment of Hotel Intercontinental Lusaka (HIL) approved in 2000. In 1998, the Board approved an equity participation of USD 2 million in Zambia Venture Capital Fund (ZVCF), and in 1995, a loan of US$ 10.83 million was extended to Swarp Spining Mills Limited (SSML) to assist the company in expanding its production capacity.
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