Lusaka, Zambia — MININGREVIEW.COM — 20 October 2008 – Mineral-producing Zambia fears global economic turmoil is likely to lower copper demand from China and the West and hurt its economic growth, which is heavily dependent on the metal.
Reporting from the Zambian capital, Reuters quoted finance minister Ng’andu Magande as saying the financial squeeze had forced institutional investors to withdraw foreign exchange in government securities, and this could hurt the kwacha, although the local currency could be stabilised.
“Perhaps our worry is the commodity prices. If the recession continues we will see demand for copper from China coming down, and this will definitely affect us,” Magande told Reuters in an interview. “The government aims to lift its economic growth from last year’s 6.2% to 7%, and to attain at least 10% by 2010.
The Zambian government raised corporate tax for copper mines from 25% to 30% earlier this year, making foreign mining companies uneasy. However, Standard Chartered Bank Plc said in its latest global economic focus that Zambia had created an important source of long-term revenue by raising the taxes.
Zambia depends on copper and cobalt for more than 63%of government revenues.