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Finance and National Planning Minister, Situmbeko Musokotwane, has announced that US$80 million will be injected into the Zambian economy, latest next week, by the investors taking over Mopani mine.
This measure, Musokotwane said, was set for a significant rebound of the Zambian Kwacha, which has depreciated significantly.
He further mentioned that another US$50 million would be injected in the economy after the first disbursement.
The minister said a cumulative total of US$620 million was expected to be invested in the mine once the deal was closed between government and the new investor.
He made the announcement in Lusaka at the official opening of the Indo Zambia Bank (IZB) new Long Acres branch.
Admitting that foreign exchange inflow had been a challenge to government in 2023, Musokotwane was optimistic that the new investments coming into the mining sector, starting with the money expected this week, would jump start the Kwacha.
“The challenge that we faced in 2023 is that of the foreign exchange rate. Forex in 2023 has been a challenge to government from where it was at K16 now to about K26. It has been a challenge, but we are ready to face that challenge.
“The key drivers of the foreign exchange are; number one, and most importantly we know that in 2023 copper production went down, and therefore forex availability in the country also went down,” Musokotwane said.
He, however, warned that the Kwacha was about to make a counter attack with the coming of investments in the mining sector.
He said government would be able to hand over Mopani mine within the next few weeks.
“We are not talking about two weeks, it could be this week, it could be next week. There is new money coming in from the investors to say while we are still finalising, getting board approvals and things like that…we do not want these assets to deteriorate even further. So, we are expecting money this week, if we do not see it this week definitely next week.
“The immediate amount that we are expecting is I think US$80 million, then shortly after that US$50 million and once the closure is done, we expect cumulative total of US$620 million to be put in Mopani so that it comes back to life,” Musokotwane stated.
On KCM, Musokotwane explained that the only thing remaining was is agreeing to the creditors on how they would be paid, after which the US$1 billion Vedanta promised would come in and start production, bringing back the mining sector to life.
He also talked about other mines coming on board such as the Luanshya Shaft 28 and the Lumwana mines.
“So those of you who buy dollars thinking that I will keep on buying dollars because one day it will reach 100 then I will benefit, please be careful because the Kwacha is about to make a counter attack, not through imaginations but because tangible money is coming in the economy to raise production,” he said.
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