Zambia has been urged to learn from the South American country of Chile, the world’s largest producer of copper, given the similarities between the two countries, from both a mining and broader economic perspective.
Zambia Chamber of Mines president Nathan Chishimba notes that Chile holds valuable lessons as Zambia, which is Africa’s second largest copper producer, seeks to attract investment, boost copper production, and ensure that all citizens benefit from the wealth generated by copper.
Chishimba said Zambia can learn from Chile about how good mining, economic and fiscal policies, implemented consistently over time, bring measurable benefits to all citizens.
He observed that while in 1970 Zambia and Chile were both producing about 680,000 tons of copper, Chile has since grown both its mining sector and its economy more than Zambia, pointing out that today, Chile produces eight times as much copper as Zambia, has a larger economy, a lower poverty rate and a higher overall standard of living for its citizens.
“And it is thanks to its mining industry that the country has been able to grow its economy. “Mining has led the country towards greater levels of wealth and prosperity, and is a large part of the reason why Chile is well on its way to being considered as an advanced economy,” says a 2014 report, The Future of Mining in Chile,” cited by Chishimba.
According to the World Bank’s 2014 rankings, Chile is now classified as a high-income country with a Gross National Income (GNI) per head of population of US$14,910, while Zambia is classified as a lower middle-income country with a GNI of US$1,680.
“Of course, Chile is not immune from the many mining challenges which Zambia is currently facing. These include high energy costs, falling copper grades, the impact of the recent Chinese slowdown on profitability and employment, and an over-reliance on mining revenue as the main source of tax revenue and foreign earnings,” Chishimba noted.
He, however, said Chile’s strong fundamentals – a vibrant market economy, good mining policies and an investor-friendly business environment – means it is better able to deal with the current market downturn, and continue to grow its economy.
