Power shortage curbs Zambia’s copper output

ZAMBIA cut its copper output forecast for this year by as much as 26 percent as prices traded near sixyear lows and a power shortage curbed production, Finance Minister Alexander Chikwanda said.

Africa’s second-biggest producer of the metal is struggling to meet half of peak electricity demand at a time when mines, including Glencore’s local unit, have announced the suspension of local operations. Zambia depends on copper exports for 70 percent of its exports, and the kwacha has fallen 46 percent against the dollar this year, the biggest drop among 155 currencies tracked.

The government had forecast 808 000 tons in output for 2015. The country produced about 708 000 tons last year.

“By the end of the year, I don’t think we’ll go far beyond, very much beyond 600 000 tons,” Chikwanda said yesterday at his office in Lusaka, the capital. “Next year, it will be an easy target to be beat. I’m sure the mining industry will come up.”

Operators had produced 441 584 tons by the end of August, he said in his budget speech to parliament on Friday.

Zambia had budgeted for copper prices to average about $5 000 (R66 664) per ton in 2016, he said. “We are not very euphoric about the price of copper.”

Copper fell to $4 855 a ton on August 24, the lowest since July 2009. – Bloomberg