KCM addresses 28th International Copper Conference in Brussels Sets out challenges and opportunities in Zambia’s Copperbelt
February 27, 2015
Brussels, 26th February, 2015 – Despite current challenges affecting the copper mining industry, Konkola Copper Mines (KCM), Zambia’s largest integrated copper producer, says prospects for the sector remain promising in the long term.
Speaking at the 28th International Copper Conference earlier today, KCM’s Commercial and Marketing General Manager, Somnath Ghosh, noted that weaker copper prices, higher operational costs and regulatory and tax issues represent significant challenges for the industry. Accordingly, mining companies, including KCM, are streamlining their businesses to adapt to these changes.
Addressing some of the world’s largest mining companies as well as investors and lenders, Mr Ghosh emphasised KCM’s responsibility to contribute to broad-based empowerment of the Zambian people, and by extension, national development. Since 2004, the company has invested close to $3 billion in the upgrading and expanding of company assets, including the Konkola Deep Mining Project (KDMP), the deepest mine shaft in Zambia, which will increase the life of the mine beyond 30 years. KCM is one of the largest contributors to the fiscus through direct and indirect taxes. The company also maintains one of the most comprehensive corporate social investment programmes in the country, focused on education, health and livelihoods.
In recent times, KCM has had to contend with significantly higher operational costs- increased taxes, employment costs and power tariffs – and significantly lower copper prices. A dialogue between industry and government instigated by His Excellency President Edgar Chagwa Lungu soon after his election last month and aimed at finding ‘win-win solutions’ to the challenges afflicting industry, shows early signs of progress. Last week the Zambian government relaxed rules requiring exporters to produce documents from destination countries to claim tax refunds.
Mr Ghosh noted the resolve of Zambia’s newly elected government to find solutions to the challenges industry faces and he cited “open and honest dialogue between industry and government” as being of paramount importance for creating an enabling operating environment that will increase investor confidence.
Mr Ghosh went on to emphasise KCM’s commitment to inclusive growth and enterprise development, even in the face of serious operational challenges in the mines.
‘’KCM has appointed a Vice President for Local Economic Development, tasked with developing local enterprise programmes that empower both the communities adjacent to the mine, but also contribute to wider economic stimulation’’, Mr Ghosh said.
Concluding on an upbeat note, Mr Ghosh said; ‘’we should be seeking to grow the industry. Zambia has abundant mineral potential. Provided the right technical and economic solutions can be found, there’s no reason why the industry cannot continue to grow in the future. Arriving at the right solution requires broad stakeholder agreement, a predictable operating environment and a commitment to consistency through strong and stable governance. KCM will continue to be active in these efforts.’’
About Konkola Copper Mines Plc
Konkola Copper Mines Plc, (KCM), one of Africa’s largest integrated copper producers, is a subsidiary of Vedanta Resources Plc. a London listed global diversified natural resources company. KCM’s operations include open pit and underground mines, several concentrators, a state-of-the-art smelter, and a refinery. The company is also developing the flagship Konkola Deep Mining Project (KDMP) in Chililabombwe, where the deepest mining shaft in Zambia has been sunk and commissioned. It also operates the Nampundwe pyrite mine, about 50 kilometres south west of the capital Lusaka.
KCM’s primary products are Copper, Cobalt, Pyrite & Acids. KCM is one of Zambia’s largest private sector employers with about 16,000 permanent and contractor employees.