DURING the week, two things happened which motivated this two-part article.
Firstly, there was a call from a reader on the Copperbelt who wanted to know where the locally produced cobalt goes since it is seemingly not accounted for in most major documentations.
According to this reader, whom I deduce could be a serving or retired miner due to his knowledge in mining, most mines have continued to produce cobalt but without declaring the production levels.
Secondly, there was a report from the Ministry of Mines and Mineral Development on small-scale gold mining.
This was to the effect that the government will issue licences to small-scale gold miners in Luano and Chongwe districts.
Mines and Mineral Development Permanent Secretary Paul Chanda said Ministry of Mines, the Ministry of Commerce, Trade and Industry and
the ZCCM- Investment Holdings (IH) will formalise the mining of gold on small scale in these districts and other parts of the country.
According to Mr Chanda these small-scale miners of gold are currently being exploited by international buyers and the move by the government will enable them make profit and expand their businesses.
While I was reflecting on this, my mind wandered away, wondering as to what other minerals Zambia was endowed with, apart from the now disappointing copper whose low prices have badly affected the country’s foreign exchange inflow.
What of nickel? Yes, why not nickel?
So apart from copper, Zambia has had cobalt and nickel as well as a horde of other minerals, and yet there has been so much emphasis on copper!
What is even interesting is that some of these metals are fetching highly on the international market like the London Metal Exchange. Cobalt
While the prices of copper have been hovering around $5,000 per tonne, those of cobalt are in the neighbourhood of $30,000 and $34,000 for a tonne.
This is according to the LME data for this week.
Some observers, including the reader whom I have already alluded to, wonder why there is a deafening silence on the proceeds from this mineral.
Similarly, there does not seem to be a deliberate effort to heighten the production of this mineral as a way of diversifying mining activities away from the beaten copper.
Granted that, according to the Zambia Extractive Industries Transparency Initiative (ZEITI) report for 2015, the copper and cobalt mining companies accounted for nearly 86 per cent of the total mining sector contribution to government for that year.
In terms of the actual figure, the cobalt and copper producers contributed K7.78 billion out of the total K9.09 billion government receipts from the sector.
ZEITI says that according to information provided by the large-scale mining companies, the Ministry of Mines and Minerals Development and other government agencies, copper and cobalt are the key commodities produced in Zambia.
Strangely and interestingly, that report goes on to mention the actual production level for copper in 2015 and other minerals like coal, emeralds and gold but leaves out that of cobalt.
In terms of export cobalt earnings are reported to have declined by 42.9 per cent to $70.7 million in 2015.
This was attributed to lower export volumes and average realised prices. Cobalt export volumes fell by 34.7 per cent to 2,978.8 tonnes from 4,562.2 tonnes in 2014.
The temporary suspension of operations at Chambishi Metals Plc (Zambia’s major Cobalt producer) in June and July of that year, due to challenges in procuring cobalt concentrate from the Democratic Republic of Congo (DRC) contributed to the decline in export volumes.
The average realised price of cobalt declined by 12.6 per cent to $23,736.3 per tonne from $27,155.4 per tonne in 2014.
That simply means that between 2015 and now the prices have risen from an average of $23,700 for a tonne to more than $30,000 per tonne.
One wonders why that price boom is not triggering investments in the mining of cobalt.
Sadly, since 2012 the path for Zambia’s cobalt production seems to have witnessed the downturn trend having dropped to number nine on the world’s top 10 cobalt-producing countries list.
The Democratic Republic of Congo (DRC) maintained its almost impregnable position at number one, while Zambia – which was once number two up to 2006 – was overtaken by producers in Asia, the Americas and North Africa.
The 2012 figures released in 2013, the United States Geological Survey, an authority on earth and life science data, placed Zambia at number nine in the world with cobalt production of about 3,000 tonnes a year.
The ZCCM Investment Holdings lists Chambishi Metals, Chibuluma Mines, CNMC Luanshya Copper Mine,
Kansanshi Mining, Konkola Copper Mines, Lubambe Copper Mines, Mopani Copper Mines and NFC Africa Mining as some of the major producers.
In part two of this column, we will look at nickel and possibly gold performance next week.
For comments call: 0955 431442, 0977 246099, 0964 742506 or e-mail: firstname.lastname@example.org.