Zambia


By Richard (Rick) Mills
Ahead of the herd

As a general rule, the most successful man in life is the man who has the best information

 

The Republic of Zambia (plus 12 million people) is a landlocked country in Southern Africa covering 752, 600 square km of the central African plateau from the River Zambezi in the south-west to the tip of Lake Tanganyika in the north-east. The neighboring countries are the Democratic Republic of the Congo to the north, Tanzania to the north-east, Malawi to the east, Mozambique, Zimbabwe, Botswana, and Namibia to the south, and Angola to the west. The capital city is Lusaka, located in the south-central part of the country.

 

Zambia was occupied by the British as a protectorate of Northern Rhodesia towards the end of the nineteenth century.

 

On 24 October 1964 the protectorate gained independence with the new name of Zambia (named after the Zambezi river which flows through the country). Zambia was governed by the socialist United National Independence Party from 1964 until 1991.

 

Zambia's industrial base, the Copperbelt (the Zambian Copperbelt accounts for approximately 46 percent of the production and reserves of the Central African Copperbelt, the largest and highest grade sediment-hosted stratiform copper province known on Earth), is centered around the towns of Ndola, Kitwe, Chingola, Luanshya and Mufulira - a string of towns on Zambia’s northern border with Congo.

 

http://www.aheadoftheherd.com/Newsletter/2010/Mukuba%20in%20the%20Zambian%20Copperbelt_files/image002.jpg

Map from geographicguide.com

 

During the socialists rule the copper mines fell under the control of the mostly state owned Zambia Consolidated Copper Mines (ZCCM). Profitable mines subsidized those that ran at a loss. The idea was to keep everyone working - the perfect socialist nirvana built on natural resource extraction. And it worked… for a while, until copper prices fell.

 

Pressure from the World Bank and International Monetary Fund forced the Zambian government to privatize the copper mines. All the mines were snapped up (Anglo American grabbed the Konkola copper mines, Glencore and First Quantum joint ventured to buy the Mopani copper mines, the Copperbelt’s second largest producer) by international investors - the profitable mines were kept and the uneconomic ones closed.

 

Today the Copperbelt is one of the richest sources of copper in the world and the area's production of copper and cobalt are of global importance. The Zambian Copperbelt is unusual among sediment-hosted stratiform copper districts in having abundant Cobalt (Co) and low Silver (Ag), Zinc (Zn) and Lead (Pb).

 

http://www.aheadoftheherd.com/Newsletter/2010/Mukuba%20in%20the%20Zambian%20Copperbelt_files/image003.gif

 

Copper accounts for 80 per percent of Zambia's foreign exchange earnings and has, since 2003, been the main driver of an annual economic growth rate of five percent. Most developing countries depend heavily on exporting just a few products as their means of earning foreign exchange but  Zambia is an extreme case - the country depends on the production and export of a single product, copper.

 

Richard (Rick) Mills
rick@aheadoftheherd.com
www.aheadoftheherd.com

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Richard is host of www.aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 300 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, Resource Investor, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, FNArena, MetalsNews and Financial Sense.

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Legal Notice / Disclaimer

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified.

 Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

Richard Mills does not own shares of any companies mentioned in this report



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