Publication: Market Monitor’s Mining Series
Publication Date: October 2014
Countries: Democratic Republic of Congo and Zambia
Authors: Andrea Stucchi; Jolanta Ksiezniak and David Butler
Executive Summary: The narrow strip of land that is colloquially known as the Copperbelt extends about 280 miles northwest from Luanshya in Zambia into the Katanga region of the Democratic Republic of Congo (DRC) is up to 160 miles in width and contains more than a tenth of the world’s known copper deposits, mostly in Late Precambrian sedimentary deposit.
Although the presence of copper was well known to the indigenous population of the Coppebelt, its existence to the rest of the world was discovered by an American scout called Frederick Russell Burnham, who in 1895 led an expedition for the Northern Territories British South Africa Exploration Co., to confirm the existence of major copper deposits in Central Africa. On his return Burnham reported to the British South Africa Company that an area 200 miles north of the falls (Victoria Falls) was probably “one of the greatest copper fields on the continent” and went on to explain how the natives had been using the metal for a very long time. Today, most people living in the Copperbelt are primarily dependent on the price of this commodity, the value of which rises and drops as a result of forces beyond their control.
Copper is used in different ways in many areas of life. It is an excellent electrical conductor and used predominantly in electric wiring and electronics. It is also highly resistant to corrosion by water and other elements and is often added to alloys and extensively used in construction. It is said that the amount of copper a nation uses is a good indicator of how technologically advanced that nation is and with worldwide copper demand increasing by more than 600,000 metric tonnes per annum and accelerating, the DRC and Zambia are now, both listed amongst the top 10 leading copper producing countries in the world.
However, both Zambia and the DRC still have a long way to go to remove the post independence legacy of years of inefficient nationalized industry, weak governance and institutions and civil war, into a stable business environment that works efficiently and coherently for international investors. But change is happening – albeit not as quickly as we would all like – and most investors that enter this region today appreciate that working in a sustainable manner is possible as reflected by the rapidly increasing production volumes that we have seen over the last few years.