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(Updates with comment by Banda in third, fifth paragraph.)
June 16 (Bloomberg) -- A copper-mining boom in Zambia, Africa’s biggest producer of the metal, is helping the country diversify its economy and repair and build infrastructure, President Rupiah Banda said.
Glencore International Plc, First Quantum Minerals Ltd. and Vedanta Resources Plc are expanding copper mines in the country and China Non-Ferrous Mining Corp. is digging one to take advantage of prices that almost doubled to $9,155 a metric ton in London over the past two years. Barrick Gold Corp. has bid C$7.3 billion ($7.5 billion) for Equinox Minerals Ltd., partly to secure the Lumwana copper mine in Zambia.
“This harvest we’re getting from the mines is helping us clean up our problems,” Banda said in an interview yesterday in Lusaka, the capital. “The money we’re getting from the industry is helping us to diversify the economy.”
Increased private investment in the industry helped boost Zambia’s copper output, which may double to about 1.5 million tons by 2020 from 713,000 tons last year, Mines Minister Maxwell Mwale told delegates at a mining conference in Lusaka. First Quantum, planning to build the $1 billion Trident mine near Solwezi in the northwest of the country, is the largest taxpayer of the copper producers, contributing more than 5 trillion kwacha ($1 billion) in taxes to the government between 2006 and 2010.
“As a result of the growth of the mining industry, the agriculture sector has also grown, because people need more food, and varieties of food,” Banda said. Zambia harvested a record 3 million tons of corn last year.
Mining is also boosting tourism as mining engineers from Australia, Canada and the U.K. bring family members and friends to visit the country, which has attractions including the Victoria Falls, Banda said. Finance Minister Situmbeko Musokotwane in October identified agriculture and tourism as the two key areas into which the economy should diversify.
Banda, 74, has ruled Zambia since 2008. He came to power after pledging to continue with policies implemented by his predecessor, President Levy Mwanawasa, who cut government spending and sold state assets to boost private investment.
Economic growth may accelerate to 7.4 percent next year from 6.8 percent this year, the IMF said in April. That compares with an average of less than 1 percent between 1990 and 1999. Earnings from copper exports, which generate 70 percent of Zambia’s foreign-exchange earnings, are forecast at more than $7 billion this year, according to Musokotwane.
While the government isn’t considering a windfall tax on miners, it is in “continuous dialog” with producers about the fiscal regime, Banda said.
“Maybe we don’t get everything in taxes as such, but their responsibilities to the societies around increase also as a result of the amount of money they’re getting,” Banda said.
In May, Zambia started a 1 trillion-kwacha (207 million) road-rehabilitation program as part of a broader plan to upgrade infrastructure across the country.
“People don’t invest in a country where they can’t move goods easily, so we’re fixing the roads, the bridges and the railway lines,” Banda said.
--With assistance from Antony Sguazzin in Johannesburg. Editors: Antony Sguazzin, Paul Richardson, Philip Sanders.
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