3.10. Zambia's Copper Dependency

Question 1

Overview

Answer 1

• Zambia is one of the world’s largest producers of copper, which accounts for approx 70% of its export earnings and over 10% of GDP.
• The heavy reliance on copper makes Zambia’s economy highly vulnerable to changes in global copper prices and demand.

Question 2

Opportunities of copper dependency

Answer 2

• Economic growth
• Employment
• Global trade relationships
• Infrastructure development

Question 3

+ Economic growth

Answer 3

• Copper mining drives significant economic activity and is a major source of government revenue.
• It attracts foreign direct investment and supports related industries like transport and energy.

Question 4

+ Employment

Answer 4

The copper industry is a major employer, providing jobs directly in mining and indirectly in supporting services

Question 5

+ Global trade relationships

Answer 5

Zambia has trade ties with key copper-importing nations, especially China, which is the largest consumer of copper for its infrastructure and manufacturing sectors

Question 6

+ Infrastructure development

Answer 6

Revenues from copper exports have financed roads, schools and hospitals in mining regions

Question 7

Challenges of copper dependency

Answer 7

• Price volatility
• Overreliance on a single commodity
• Environmental impacts
• Debt issues
• Limited local benefits

Question 8

– Price volatility

Answer 8

• Zambia’s economy is vulnerable to fluctuations in global copper prices
• e.g. the 2015 downturn in copper prices caused economic slowdown, job losses and reduced government revenues

Question 9

– Environmental impacts

Answer 9

Mining activities have caused deforestation, water pollution and land degradation in copper-rich areas like the Copperbelt

Question 10

– Debt issues

Answer 10

• Zambia has borrowed heavily, partly using future copper revenues as a guarantee
• Falling copper prices can lead to difficulties in repaying debts

Question 11

– Limited local benefits

Answer 11

Many copper mining operations are owned by foreign companies meaning profits often leave the country rather than benefitting local communities

Question 12

Evaluation

Answer 12

• Dependency provides economic opps but also significant risks
• To reduce vulnerability, Zambia must focus on:
  
  • Diversifying the economy
  • Encouraging value addition in the copper industry
  • Investing in sustainable practices to minimise environmental damage