19 Jun 2009 09:44

Zambian govt unlikely to raise stake in Chinese-controlled copper mine

Guiyang. June 19. INTERFAX-CHINA - The Zambian government is unlikely to increase its holding in China Nonferrous Metals Mining (Group) Co. Ltd.'s (CNMC) 5 million-ton Chambishi Copper Mine, which is located in Zambia, a CNMC employee told Interfax on June 18.

"The Zambian government previously expressed an interest in increasing its stake in domestic copper mines as copper prices have rebounded, but I believe that as copper prices are set to fall in the third quarter, they will shelve that plan. In addition, the Zambian government is now not in a position to change the stake holding structure as we have signed an agreement," Liang Boyi, a senior employee from CNMC, told Interfax at the Nonferrous Metals Mining Forum 2009 in Guizhou Province's Guiyang City.

According to previous foreign media reports, the Zambian government said it will increase its stakes in all foreign-owned copper mines in Zambia to between 25 percent and 35 percent from the current level of around 15 percent in order to exercise more influence in their operation, as it is concerned about possible mine closures and the resulting job cuts.

Currently, CNMC hold an 85 percent stake in the Chambishi Copper Mine, while the Zambian government hold a 15 percent stake, according to Liang.

Furthermore, analyst Li Yusheng from Beijing Antaike Information predicts that copper prices on the London Metal Exchange (LME) are likely to fall to $3,700 per ton in the third quarter of this year, as that period traditionally experiences slack global copper demand from both the air-conditioning and electric wire producing industries.

The three-month LME copper contract price ended at $4,970 per ton on June 18, 0.2 percent up from the previous trading day.