ZAMBIAN COPPER INDUSTRY HOPES FOR STEADY OUTPUT
  Zambia's copper mining industry is hoping
  to achieve and maintain production at over 500,000 tonnes a
  year in the next few years despite low world prices,
  deteriorating ores and shortages of mine inputs, industry
  officials said.
      But Zambia's decision to abandon last May 1 a tough
  International Monetary Fund (IMF) economic recovery program has
  introduced an element of uncertainty into plans to restructure
  the ailing industry and boost profitability, they said.
      Copper production by the government-controlled Zambia
  Consolidated Copper Mines (ZCCM) for the 1987 financial year
  ended March 31 improved slightly to about 471,000 tonnes from a
  record 1986 low of 463,354 tonnes.
      "We are convinced that by the end of the 1988 financial
  year, copper production could well be over 500,000 tonnes due
  to greater availability of spares and equipment," a ZCCM
  official said.
      ZCCM officials said the production of cobalt, another
  strategic income earner, will also be tailored to meet demand.
      Finished production in 1986 was 4,565 tonnes, 911 tonnes
  higher than the previous year and the best production achieved
  to date.
      Protracted low world metal prices have badly hit the copper
  industry in Zambia, the world's fifth biggest producer. Mining
  is monopolised by ZCCM and accounts for about 90 pct of the
  country's foreign exchange earnings.
      Production has also been seriously affected in recent years
  by equipment breakdowns, deteriorating ore and shortages of
  spare parts, fuel and lubricants. The 463,354 tonnes output
  last year compared with a peak 1975 output of 700,000 tonnes.
      A five-year production and investment plan launched in 1984
  by ZCCM is being funded by the European Community, the African
  Development Bank and the World Bank.
      The plan foresees the shutdown of some seven mining and
  metallurgical units on the grounds they are unprofitable.
      ZCCM, the second largest employer after the government, has
  said it intends to lay off 20,000 of its 60,000 workforce as
  part of the plan.
      More than 250 mln dlrs have so far been channelled into the
  industry in a bid to improve efficiency and profitability under
  the five-year restructuring plan.
      Company officials said although reserves were being
  depleted, Zambia could continue to produce copper beyond the
  end of the century, though at lower levels of production.
      Industry sources said ZCCM's projected pre-tax profit for
  the financial year ended March 31 would be around 500 mln
  kwacha. But with the current mineral export tax level being
  levied, a net loss is likely to be registered.
      ZCCM recorded a net loss of 718 mln kwacha in 1986 compared
  with a net profit of 19 mln kwacha the year before.
      Under the foreign exchange auction system introduced in
  1985, ZCCM's profits from its foreign exchange earnings rose as
  the value of the kwacha fell to 21 to the dollar from just over
  two to the dollar.
      But on May 1, President Kenneth Kaunda abolished the
  auctioning system, inspired by the International Monetary Fund,
  and announced Zambia would pursue a go-it-alone economic
  strategy based on national resources.
      ZCCM officials are still cautious over what effects the
  break with the IMF will have on the industry's plans.
      "We are still consulting to see how the new measures will
  affect us but it is too early to say just how we shall fare
  under the new situation," Peter Hansen, director of operations
  and third in the ZCCM hierarchy, told Reuters.
      Some analysts believe the new officially-fixed exchange
  rate of eight kwacha to the dollar will hit ZCCM's export
  profits.
      "Most specialists I have talked to tell me the break-even
  point for ZCCM is a rate of 10 kwacha per dollar," Frederick
  Chiluba, leader of the Zambian Congress of Trade Unions said.
      High production costs continue to bedevil the Zambian
  industry.
      Zambia mines copper at a relatively expensive rate of 69
  cents per pound, compared with 55 cents in the United States
  and under 40 cents in Chile.
      The industry also faces transport problems due to Zambia
  being landlocked. The government confirmed this year it had
  stopped sBending copper south through South Africa.
      Over 80 pct of shipments, some 35,000 tonnes a month, are
  sent by rail to the Tanzanian port of Dar-es-Salaam, while
  5,000 tonnes go via Zimbabwe to the Mozambique port of Beira.
  Transport has often been hit by shortages of wagons, spares and
  fuel.
  

