Role of the Zambian Mining Sector and Current Status of Mining Activity

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1 Role of the Zambian Mining Sector and Current Status of Mining Activity Masaharu Marutani JICA Study Team Seminar for Promoting Investment in Zambia Tokyo 16 December, 2008

2 World Copper Reserves (Mt) Mineral Commodity Summaries, 2008

3 World Copper Resources (Mt) Mineral Commodity Summaries 2008

4 World Copper Mine Production (Kt) World Metal Statistics Yearbook 2008

5 Locations of Mines

6 Production of Copper in Zambia t New copper producer Mines Development Department Lumwana copper project Annual production: 169Kt Cu Reserves: 0.015%Co Resources:

7 Photos from the Copperbelt New shaft of Konkola Deep Mine Nkana copper smelter 180Kt Copper Ore Shale Unit Underground in Mindola mine Lumwana concentrator

8 World Cobalt Reserves (Kt) Mineral Commodity Summaries, 2008

9 World Cobalt Resources (Kt) Mineral Commodity Summaries 2008

10 World Cobalt Refined Production (t) World Metal Statistics Yearbook 2008

11 GDP by Economic Activity GDP - real growth: 6.2% (2007) Agriculture 13% IMF: Statistical Appendix, 2007 Mining 8% Services 52% GDP at Market Prices US$ 11 billion Manufacturing 10% Construction 11% Electricity, gas & water 3% Tourism 3%

12 Zambia s s Exports and Imports by Commodity Machinery 7% Cereal 2% Sugar 2% Exports FOB base Others 12% Metals 71% Imports CIF base Others 38% Machinery 22% Metalliferous ores 6% US$ 4.6 billion Telecommunications 3% US$ 4.0 bill Vehicles 9% Petroleum 12% Fertilizers 3% Metalliferous ores Electrical machinery 3% Iron and steel 5% 5% Zambian Central Statistical Office, 2007

13 Zambia s s Exports and Imports by Country Japan 0% India 3% Egypt 4% China 7% Exports FOB base Others 16% US$ 3.8 billion Switzerland 39% Japan 2% China 3% India 3% Imports CIF base UAE 10% Others 15% UK 4% US$ 3.0 billion Other European countries 6% South Africa 46% Thailand 7% Other SADC 4% Congo 3% South Africa 11% UK 3% Other European countries 3% Other SADC 3% Tanzania 2% Zimbabwe 6% Zambian Central Statistical Office, 2006

14 Trade between Japan and Zambia Bulldozers and machinery 7% Others 10% Exports FOB base Telephone base stations 10% JPY 3.0 billion US$ 25 million Cars and other motor vehichels 73% JPY 14.8 billion US$ 125 million Imports CIF base Trade Statistics of Japan, 2007

15 Zambia is a paradise of secondhand Japanese cars

16 Japanese Imports of Cobalt Metal 16,000 10% of Japan s Cobalt comes from Zambia Finland 14,000 12,000 Australia Canada Norway 10,000 Zambia 8,000 Belgium 6,000 4,000 Congo Others 2, Year METI

17 Japanese Imports of Metals from Zambia \

18 Mineral Deposits and Occurrences

19 Licences Issued Number Large-scale Prospecting Licences Large-scale Mining Licences Small-scale Prospecting Permits Small-scale Mining Licences Gemstone Licences Artisanal Mining Rights Year Mines Development Department

20 Large-Scale Prospecting Licences Mines Development Department

21 Exploration Project: Cheowa Copper-Gold Project Indicated Resource: 0.23g/t Au Inferred Resource: 0.38g/t Au

22 PRESCRIBED FEES, AREA CHARGES, AND MAXIMUM AREAS FEES TYPE OF MINING RIGHT OR APPLICATION APPLICATION FEE IN FEE UNITS LICENCE FEE IN FEE UNITS Large-scale Prospecting Licence 2,000 10,000 Large-scale Mining Licence 2,000 10,000 Large-scale Gemstone Licence 2,000 10,000 Prospecting Permit 500 2,000 Small-scale Mining Licence 500 2,000 Small-scale Gemstone Licence 500 2,000 Artisan s Mining Right Transfer of Prospecting, Large-scale Mining, and 2,000 10,000 Large-scale Gemstone licence Transfer of Small-scale Mining, Prospecting 500 2,000 Permit, or Small-scale Gemstone Licence Alteration of Prospecting, Large-scale Mining, and 500 2,500 Large-scale Gemstone Licence Alteration of Small-Scale Mining, Prospecting Permit, or Small-scale Gemstone License Alteration of Artisan s Mining Right Fee unit = ZMK180.00

23 NON-MINING RIGHTS/OTHERS CATEGORIES LICENCE, CERTIFICATE, OR PERMIT APPLICATION FEE IN FEE UNITS CERTIFICATE, LICENCE, OR PERMIT FEE IN FEE UNITS Mineral Processing Licence 2,000 10,000 Transfer of Mineral Processing 2,000 10,000 Licence Alteration of Mineral Processing 500 2,500 Licence Annual Operating Permit 500 5,000 (Large-scale ) Annual Operating Permit 250 1,500 (Small-scale) Gemstone sales certificate 250 1,000 Mineral Import permit 500 3,000 Mineral Export permit Geological or Mining consultancy 500 2,500 permit Mineral Analysis laboratory Permit 500 2,500 Mineral Analysis Certificate Valuation certificate 250 1,000 Replacement of licence, permit, or certificate Tonnage fee for building materials - 5 Fee unit = ZMK180.00

24 AREA CHARGES GRZ Fee Units Year 1-2 Year 3-4 Year 5-6 Year 7 and thereafter Prospecting licence (per square km per year) Large-scale mining licence (per square km per year) Large-scale gemstone licence (per hectare km per year) Prospecting Permit (per hectare km per year) Small-scale mining licences (per hectare km per year) Small-scale gemstone licence exempt in Year 1 (per hectare km per year) Artisan s mining right (per licence area) PRESCRIBED MAXIMUM AREAS Fee unit = ZMK TYPE OF MINING RIGHT OR LICENCE MAXIMUM AREA Square kilometres Cadastre Units Prospecting licence ,940 Large-scale Mining licence or Large-scale Gemstone 250 7,485 licence Prospecting Permit Small-scale Mining licence Small-scale Gemstone licence Artisan s Mining right