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Stanbic to unearth Zambia’s potential in mineral processing

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There is need to invest in value addition in the mining sector if Zambia is to minimise the impact of changes in the prices of minerals on the international market, says Stanbic Bank Zambia Chief Executive Officer Leina Gabaraane.

Mining in Zambia contributes about 12 percent to GDP and accounts for 75 percent of the country’s exports. The industry is also the largest employer in the country after government.

Speaking on the side lines of this year’s Investing in Africa Mining Indaba in Cape Town South Africa, Gabaraane said Zambia is always heavily impacted by a fall in the price of minerals – especially copper – due to a lack of an economic buffer to shield it from such downturns.

He said: “Zambia’s heavy dependence on the export of raw mineral resources means that our economy is highly sensitive to any changes in mineral prices on the international market.

“Shockwaves from a fall in the cost of copper on the London Metal Exchange are keenly felt across the country’s economy as it dents our export earnings and foreign exchange inflow, which in turn affects the USD:ZMW ratio.

“Therefore, a thriving minerals processing industry will go a long way in promoting economic stability, as the market for finished products is less susceptible to huge fluctuations in commodity price. An added advantage of mineral beneficiation aside from increased forex inflow is the creation of more employment opportunities in the processing industry which may have a positive impact on poverty reduction,” he said.

The bank chief said Stanbic was exploring ways in which it could help stimulate growth in the processing industry through investment so that the country can export more processed products than raw materials.

Insufficient investment in mineral beneficiation has been a persistent problem for many mineral-rich countries in Africa. Several countries spend billions each year to import products processed from the raw materials produced within their borders thus vastly limiting their GDP growth as well as currency stability.

In his opening remarks at the 2019 Mining Indaba, South Africa’s Minister of Mineral Resources Mr Samson Gwede Mantashe said Africa’s mineral wealth can serve as the cornerstone for prosperous and diversified economies not dependant on the export of unprocessed minerals.

He noted that it was imperative for African countries to quickly recognise the possibilities and investment opportunities in mineral processing and divert more resources to develop downstream and input industries.

Stanbic Bank Zambia is one of the biggest players in Zambia’s mining industry, with over $3 billion invested in the sector so far.

“Previously, limited access to finance had stifled growth in the extractive industry as well as its subsectors,” Mr Gabaraane said. “Now Stanbic stands ready to fill this gap while also providing working capital to green field projects.

We recognise the significance of mining to the local economy hence we will continue to look for ways to increase our contribution to the sector’s growth and maximise the country’s benefit from it – Because Zambia is our home, we drive her growth.”

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Start: 2019-07-01 End: 2019-07-31