First Mining Drc-Zambia Sep/Oct 2017 FMDRC-Zambia Sep Oct

Mining NEWS Zambia copper production to power on due to strong copper prices Zambian copper production remains on a supportive of the sector and rising copper However, BMI Research expects Zambian positive growth trajectory due to government prices will incentivise domestic miners to ramp President Edgar Lungu's strong commitment to support for the mining sector and strong copper up production during H2017. mining sector development in the country will Presidential support to minimise risks shortages on Zambia's copper production this According to the Zambian central bank, As BMI Research has outlined in previous year. Zambian copper production over H2017 analysis, the ongoing power shortages resulting totalled 362 Kt, down slightly from 367 Kt in from the country's over-dependence on hydro- prices. likely minimise any serious impact of power For example, following President Lungu's 2016. power and rising power tariﬀs is the key risk i nte r ve nt i on on 3 0 Au g ust , Gl e nc ore No details have been given by the Zambian facing the Zambian mining sector moving announced they had reached a deal with authorities on this decline, yet it is likely that forward. Zambia's ongoing power supply problems have Copperbelt Energy Corp. that will restore full power supply to the Glencore's Mopani been the key constraint on copper mining In August alone, two of the country's main activities. copper producers, Glencoreand First Quantum Minerals (FQM), were forced to reduce power Previously in May 2017, President Lungu also Despite this setback, the Zambian government at key operations due to tariﬀ disputes with resolved a court case involving FQM and the operations. expects copper production to rise from 774 Kt electricity provider Copperbelt Energy Corp. state investment company ZCCM Investment in 2016 to 850 Kt in 2017, amounting to 9% y-o- e combined copper output of mines aﬀected, Holdings, which has a 20% stake in FQM's y growth. Glencore's Mopani and FQM's Kansanshi, Kansanshi mine. amounted to over 400 Kt as of 2016. is is the view of BMI Research - a unit of the ZCCM began arbitration proceedings against Fitch Group. is represents more than 50% of current FQM, claiming 1.4 billion from the miner over While not as optimistic, BMI Research is Zambian copper production, posing serious allegations it had wrongly used ZCCM's cash, positive on Zambian copper and maintain its risks to Zambia's copper production outlook but ultimately dropped the case following forecast of 7% growth this year as Zambian this year. President Lungu's intervention. President Edgar Lungu remains personally Page12 | Sep - Oct 2017 | FMDZ

First Mining Drc-Zambia Sep/Oct 2017 FMDRC-Zambia Sep Oct | Page 12