ZAMBIA Chamber of Mines president Goodwell Mateyo says local mining firms should take advantage of the COVID-19 pandemic to supply more copper on the international market, while other suppliers are still contending with the situation.
Mateyo observed that there was currently a sharp demand for copper on the international market as other suppliers in COVID-19-hit areas, such as Chile, were unable to operate normally, adding that local firms in Zambia could take advantage and supply more.
“The prices of copper are okay. It kind of crashed between January and March, but it has recovered and it’s difficult to focus on what the prices of copper will be in the long-run for as long as the virus is concerned and this is because South America has been badly affected by the Coronavirus, far worse than Africa, and as a result of that, it result in deficits of supply, while on the other hand, China, which has more demand of the metal, has seen its economy recovering. Therefore, its demand is rising. And as a country, we should have taken advantage of this situation to supply more,” Mateyo said in an interview.
“But until things get a little bit more stable, that’s when we will be able to predict what the prices will be like. But during this period, we should have taken advantage to supply more since other suppliers have been badly affected by the situation. The macroeconomic environment is still highly volatile, but with regards to the prices locally, initially, the impact was negative. But subsequently, the impact was not very, but highly positive. It was the initial impact that caused some mines to go under care and maintenance.”
He, however, acknowledged firms might not fully take advantage of the situation as increasing production may be costly for some mining operations.
“So, the logic is to increase production action, but the thing is that increasing production in the mining sector is not like turning a speed boat on and then start cruising. It’s not like you press a button and then overnight, production increases; to increase production, you have to make certain significant investments and then you will be able to reap the benefits months, if not, years later. So, unfortunately, it’s not as easy as pressing a button and increasing production. But logically, we should be supplying more copper during this period,” said Mateyo, who is also Mopani Copper Mines’ senior legal counsel.