FQM to remain buoyant despite drop in copper prices

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First Quantum Minerals (FQM) has said the continued instability in copper prices on the international market will not have adverse effect on its operations because it has an effective cost control mechanism.


And an economist has charged that the continued drop in copper prices will negatively affect the economic performance of Zambia at the country largely depends on copper.


FQM Country Manager Kingsley Chinkuli said although it was obvious that the levels of profits will drop, the company has in place a cost control strategy that will ensure the cost of production is kept down.


General Chinkuli told ZANIS in an exclusive interview that FQM, as an open pit operator, does not require heavy costs of production hence the less impact of falling copper prices.


He said the company also diversifies its minerals and carries out exploration works which lead to the discovery of other minerals that cushion the copper costs and keep the company going.


Gen. Chinkuli however expressed concern on the continued decline in copper prices and feared that will affect the operation of the general mining sector in the country and lead to a cut down on labour force.


He boasted of FQM being the largest tax payer to government and reassured the nation that the mining company will not trim its labour force because of the cost control measures.


Meanwhile, a local economist Yusuf Dodia has charged that the continued decline in copper will negatively affect the operations of the national budget.


Mr. Dodia, who is also Private Sector Development Association chairperson, noted that copper exports were a major contributor to the national revenue through money coming into Zambian banks from the sales of the same mineral.


He observed that the mining sector in the country will reduce investment due to less profits, a situation he said will result in lower taxes being paid to government.


He further said the trend will also reduce the country’s access to foreign currency.


For three month now, copper prices on the London Metal Exchange had eased 0.25 percents to US$6,763 per tonne by 07:08 GMT, after falling more than 2 percent the session before.