Zambia mining revenues drop 30% due to covid-19
Mining companies in Zambia, Africa’s second copper producer, had a 30% drop in sales in the three months to April due to the Covid 19 pandemic, and the fallout could continue for at least 12 months, the mine chamber said Thursday.
Severe global movement restrictions have hit mining supply chains and hindered copper exports and sales, the mining industry association said, affecting corporate revenue and the treasury.
The metal is Zambia’s most important foreign exchange earner and a key driver of tax revenue.
“The decline in mining revenue is reflected in the decrease in mineral charges, as royalties are charged for every tonne of copper sold,” the chamber said.
License fees were estimated at $ 60-65 million in the three months from February to April, which is approximately two-thirds of the expected $ 90 million.
A drop in copper prices also weighed on corporate earnings.
Mining companies have also seen an increase in costs as they take preventive measures against Covid-19 to ensure the safety of workers and surrounding communities, the mine chamber said.
“Zambia’s miners have been struggling with increasing costs for years, and we are concerned about the possible consequences of such a huge drop in profits that is now happening,” it said.
The chamber said that mining companies would likely face income pressures from the pandemic for at least 12 months.
Mining companies operating in Zambia include First Quantum Minerals, Glencore, Barrick Gold Corp and Vedanta Resources.
