A senior Standard Chartered Bank official said that Zambia, African leader in copper production is poised to continue driving the Asian economy because of the abundant natural resources that are rare in the Eastern world.
Mr Vis Shankar CEO of Standard Bank for Europe, Middle East, Africa and Americas said that the dire need by China for natural resources such as copper would continue in many years to come.
While Zambia and other African countries had seen their economies being driven up by China’s search for the resources, the undervaluing of resources had been corrected. The partnership between Zambia and China saw the 2 countries come out of the global financial crisis even stronger. Zambia was now China’s second largest trading partners in the sub Saharan Africa.
During his visit to Zambia Mr Shankar who held talks with Finance and National planning Minister Mr Situmbeko Musokotwane, Commerce Minister Mr Felix Mutati and central bank governor Mr Caleb Fundanga and expressed excitement at Zambia’s investment opportunities besides the key trade with Asia.
He pledged his bank’s commitment to guaranteeing Zambia’s investment in key sectors. On Zambia’s plans to secure a sovereign rating, he expressed optimism that the country will attain the intended status quo and excite more credible investment in the country as well as trade in reputable bonds to build its economy. He however declined to state what rating Zambia should fight for as it secures to be internationally recognized.
Meanwhile, the bank predicted that copper mining companies will probably not meet global demand for 2011 and 2012 year because it is growing faster than supply.
Mr Walter de Wet Standard Bank head of commodity research said that the copper market would be in deficit this year and next year adding that it is estimated that there would be a deficit of about 385,000 tonnes for 2011 and 465,000 for 2012 and that demand is growing faster than supply at this stage and mining companies will not meet this global demand.
He said that demand will remain strong until 2013 and after that we don’t see demand falling; it will be a case of supply start catching up with demand.
On copper benefits to Zambia and investor sentiments in view of the forthcoming general elections, Mr de Wet noted that higher copper prices were an incentive to start new projects. And new projects means new jobs as well as revenue for government speaking from a copper perspective people view Zambia as a source of new supply. No doubt and as long as copper price remain favorable and obviously economic conditions are favorable and we should see people investing in new mining projects.
According to Mr De Wet, the world should expect a tighter copper market in 2012 as said China and other emerging markets were driving the increasing copper demand whose price was projected to stay at USD 9,200 per tonne in 2011 and USD 10,000 per tonne in 2012.
He said that since 2008, China has been importing over 180,000 metric tonnes of copper per month and this is more than what some Zambian mines produce per year so this demand of course it being driven by China and other Asian and emerging markets and we are seeing the USA and other developed countries also coming on board and the construction.
Source: http://www.steelguru.com
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