By Chris Mfula
LUSAKA (Reuters) – The job cuts sweeping across Zambia’s mines could get worse in Africa’s second-biggest copper producer as companies scale down operations due to electricity shortages and higher production costs, an official said on Wednesday.
An electricity shortage and weaker copper prices have put pressure on Zambia’s mining industry, threatening output, jobs and economic growth in the southern African nation.
“Some parts of mining operations will be shut down or scaled back to cope with the load-shedding (power cuts),” Zambia Chamber of Mines economist Shula Jalasi-Shula told Reuters.
“Power is used not only in mining and processing, but also in maintenance, especially in our old underground mines where power is an extremely high overhead cost. We need a reduced royalty rate to help cope with the prevailing commodity price.”
Zambia’s government in June cut mineral royalties for underground mines to 6 percent from 9 percent and those of open cast mines to 9 percent from 20 percent following an outcry by mining companies.