A Lusaka-based Economist has raised concerns about Zambia’s mining sector, warning that higher expenses could weaken investor confidence and slow future projects.
Speaking during an interview with Lusaka Star, an Economist Kelvin Chisanga said higher fuel costs lead to increased operational costs such as machinery, transport and mineral processing.
Mr. Chisanga said this may also slow down projects and reduce mining profitability margins.
“This can also affect Zambia’s competitiveness against major copper producers such as the Democratic Republic of Congo (DRC), Chile and Peru,” he said.
He added that this is because foreign investors closely monitor production costs before committing capital to mining projects.
He further said lower mining profitability could weaken export growth potential, while reduced export earnings may place pressure on the Kwacha and ongoing accumulation processes.
Meanwhile, a Mining Expert Edward Simukonda said increased fuel prices may lead to reduced production in mines and possible mine closures.
“The most affected area is the haulage of oil because machines are needed to extract the oil from underground to crushing plants,” Simukonda said.
He urged the mining sector to shift to electric systems in order to avoid challenges caused by rising fuel costs.