Glencore's investment to increase Zambia's copper production

Plans by Swiss commodity trading and mining company Glencore Plc to invest more funds in its Zambian unit will increase copper production in the southern African nation, an analysis by Moody's Investors Services has shown.

The Swiss mining firm, which has a 75 percent stake in Mopani Copper Mines, said late March it will invest more than 1.1 billion U.S. dollars from 2016 to 2018 to help improve the mine's operational efficiency and extend its lifespan.

The funds will go towards sinking three mine shafts.

Glencore's investment will reduce production costs and increase the efficiency and profitability of the mine shafts, allowing them to raise production and take advantage of the potential for a gradual recovery in copper prices over the next three to five years, according to the analysis seen by Xinhua on Friday.

"We project that this will contribute to bringing Zambia's real GDP growth to five percent or more in 2018. Increased copper production will also raise government revenues, contribute to fiscal consolidation and return public finances to a sustainable path," it added.

The investment will increase copper production to over 800, 000 tonnes.

The move will also send a positive signal of investor confidence in view of the economic challenges Africa's number two copper producer was currently facing.

In September last year Glencore announced that it would suspend its operations in its Zambian operation for 18 months due to low copper prices, electricity shortages and unstable tax regime. Endit