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COVID-19 devastates Zambia’s mineral revenue

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Zambia’s Chamber of Mines Chief Executive Officer Sokwani Chilembo, bewailed the devastating effects of the global COVID-19 lockdown, as the Zambian mining sector faces an omen of collapse during the next 12 months if the global lockdown persists.

The effects of the global pandemic to the mining sector were revealed on Thursday the 23rd at the launch of the Chamber’s policy brief for a post-COVID Zambian economy, entitled The Road to Recovery, at the Mulungushi International Conference Centre in Lusaka.

The conference was also meant for stakeholders to present ideas that can make the mining sector to survive the COVID-19 current effects, as well as to establish strong relations between the mining sector and the government during this period.

“We have published this Report to kick-start a public debate, and to generate a dialogue with Government,” said Chilembo

Some of the major impediments that have been attributed to COVID-19 pandemic, includes global restrictions on movement of minerals which has crippled the mining supply chain, impeding the export of copper which has also resulted in copper price falling by an average of 12 percent over the same period when compared to 2019.

According to statistics presented at the conference, mining companies in Zambia have collapsed in revenues by 30 percent.

“So, while companies have been able to maintain production levels, they have struggled to export and sell their copper, and have received a considerably lower price for the sales they have made,” said Chilembo.

The fall in mining revenues comes also with a fall in mineral royalty payments to the government, the fall in royalty payments is estimated to be between 60-65 million over each three-month period.

Chilembo noted that before the mining sector started to experience COVID-19 negative effects, the mining sector had already been facing other huge problems such as the escalating mining costs over recent years, and the drying up of capital.

According to Impact Capital Africa (ICA) June survey for mining and mining services sector, mining businesses will completely fail within the next three to twelve months.

“This finding is of great concern, given the significance of the sector to the wider Zambian economy,” added Chilembo.

According to the World Bank forecast, economic growth in Sub-Saharan Africa will decline between minus 2.1 and minus 5.1 percent in 2020 due to the devastating impact of the global pandemic.

Liberty Pazvakawambwa SADC News Correspondent

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