Fuel prices set to affect number of investors willing to invest in the mining sector- Zambia

The Emeralds and Semi-Precious Stones Mining Association of Zambia-ESMAZ have stated that due to the high cost of fuel, the mining sector is expected to attract low investment this year.

The increase in fuel prices, according to Association President Victor Kalesha, will reduce the number of investors willing to invest in the mining sector because mining is a high-cost venture, and an increase in fuel prices will result in higher production costs.

In an exclusive interview, Kalesha said that artisanal small-scale miners and other small-scale miners had hoped that the mining sector would attract several investors this year as a result of the change of government, but that this was not the case.

Kalesha also noted that the production levels of big mining companies like Grizzly Mining and Kagem Mining will be affected as the cost of fuel is too high for production adding that large-scale mines like Grizzly Mining and Kagem Mining spend not less than 3 million dollars per month on operation costs.

He added that mining depends on the use of fuel equipment and there is no other alternative that mining firms can adopt to maintain high production levels amid high fuel prices.

Kalesha explained that the fuel price increase might also result in the reduction of labour as most companies might feel they are incurring too many costs and might want to cut on the labour to cut out some costs.

“The increase in fuel prices might also affect the salary increment of mine workers as there will be too many costs going into the operations while having less production. It will also affect social responsibilities because it will be very difficult for companies that are in operation and production to settle for certain social responsibility ventures”, he said.

He hopes that the war in Ukraine and Russia would be resolved soon so that things can go back to normal and mining firms can operate on normal levels.