Mining companies in Zambia have recorded 30% decline in revenue over the period February –April 2020. This has been largely attributed to the devastating impact of the COVID-19 pandemic has had on copper earnings.
According to the Zambia Chamber of Mines data, the pandemic has cut Zambian mining companies’ copper sales as a result of a disruption in the mining supply chain that facilitates the export of the red metal to foreign markets.
Furthermore, data reveals that the severe global restrictions on movement have badly affected the mining supply chain and hindered the export and sale of copper, and that the copper price collapse early in the crisis, though has since strengthened, is still down on average by 12% over the ame period in 2019.
The decline in revenue also correlates with a fall in mineral royalty payments. According to a statement from ZCCM, royalty payments are estimated to come in at US $60.65m over the three-month period. This is as opposed to the US $90m that was expected.
Commenting on the mining industry’s dwindling earnings, the Chamber CEO Sokwani Chilembo stated that mining companies had performed well in maintaining production amid the COVID-19 crisis.
He further added that the industry has done a magnificent job of maintaining production over the COVID-19 crisis period. However, and for various reasons, the mining revenues have fallen massively. Moreover, Zambia’s miners have been battling even higher costs for years, and the government is concerned about the potential consequences of such a big hit to the earnings occurring at the moment.
He also said that through the unpredictable period, it could be hard to foresee the near unforeseeable future. However, he expressed his hope that the revenue pressures may ease in the months to come. This, he said, could possibly be after a year or more.