Investigating Zambia’s potential in copper value addition

Abstract

Zambia copper industry has been in existence for over a century. The country contains best known reserves in Africa and holding about 6 percent of world’s known copper reserves. Copper exports account for more than 70 percent of total exports and 13 percent of the country’s GDP. Despite her rich history of copper mining, Zambia still exports more than 70 percent of her raw copper blister/ anodes with very little value addition. Zambia produces 40 percent of Africa’s total copper production second to DRC. This is a very high production volume but in terms of value is very low worth as Zambia mainly participates in the upstream copper production. Copper mining and processing can be divided into upstream and downstream value chain supply or stages. Typically, the upstream has very low value. About only 5 percent of copper cathodes are consumed locally to produce finished products such as copper rod and cables. The study discussed and reviewed some aspects of value addition in Zambia’s copper mining industry in relation to the supply and demand of copper. Furthermore, the study assessed the supply chain constraints downstream and investigated the impact of current government policies affecting the copper value addition chain in Zambia. The study reviewed both local and regional Markets for final copper products to warrant more copper value addition. The research involved extensive review of literature on Zambia copper mining industry upstream and downstream and visitation to the copper rods fabricating companies namely ZAMEFA and Neelkanth cables. In order to understand the impact of government policies on value addition, discussions with relevant ministries were also conducted. It was evident from the study, that Zambia has a potential to increase its proportion of copper value addition further downstream due to high demand of final copper products imports but has constraints to achieve it. The study observes that Zambia participates more in the low copper value stage. However, if it participated in the high value added copper stage, the country could have earned US$6.5 billion per year from smelter production alone or US$10 billion from copper cathodes and a further 30 times more on cables/wire sales at full production potential.