Chinese firm to invest $400m in Zambia mines

China Nonferrous Metal Mining Corporation (CNMC) has pledged to invest $400 million (Dh1.46 billion) in Zambia's Luanshya Copper Mines after formally taking over the running of the mines, officials said.

Mines and Minerals Development Minister Maxwell Mwale said CNMC would develop the Mulyashi project, which previous owners of LCM had said could start producing 60,000 tonnes of copper cathode by 2010.

"It is the expectation of the government that CNMC will invest no less than $400m in re-opening Baluba mine and developing the Mulyashi project," Mwale said during the ceremony to hand over the mine to CNMC.

Both Baluba and Mulyashi are part of LCM, a joint venture of International Mineral Resources (IMR) and Bein Stein Resources Group (BSRG), which also operated Chambishi Metals Plc, the southern African country's largest cobalt producer.

CNMC Vice-President Tao Xinghu said CNMC would reopen Baluba and develop Mulyashi as soon as possible, but he gave no timeframe.

"For Mulyashi, we need to carry out [a new] study and make a new development plan," Tao said.

The minister said the re-opening of the Baluba mine would make it possible to reemploy some of the 1,740 miners who were laid off after the mine was placed under care and maintenance at the end of last year.

CNMC's Xinghu said at the ceremony the company had commissioned the Chambishi smelter after a $520m investment in the operation and its support facilities.

Tao said the smelter, with an annual capacity of 150,000 tonnes, would help Zambia increase its output.

"Our investment in Zambia and in Luanshya aims for long-term development rather than for profits in a short time," Tao said.

Mwale also said the government had raised its own stake in Luanshya to 20 per cent from 15 per cent, following the pledge it made earlier this year to raise state shareholding in all the mines to 35 per cent.

Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here