Productivity Change in Zambian mining

The University of Zambia, 2016

Abstract This paper examined empirically the effects of copper production, foreign investment, international copper prices and exchange rate volatility on employment levels in Zambia’s mining sector. The period focused on was from 1970 – 2015 using secondary data, in form of time series. Fully Modified Ordinary Least Squares Model was employed in the study based on various diagnostic, evaluation and criteria that we wanted to assess the long run impacts of the stimulus on the employment levels in the mining sector. It was concluded that model was statistically significant and the research showed a positive relation of FDI, Copper Production to employment levels and a negative relation to Copper Prices and Nominal Exchange Rate. The model can be utilised for macroeconomic policies in able to reduce unemployment rate in Zambia’s mining sector.

2008

CBM TEC Conference Presentation May 2016, 2016

• Since privatisation in 2000, copper production and productivity problems have dogged the Old-Copperbelt underground mines inZambia. • The paper presents the findings by Copperbelt University mining and business students and faculty, Kitwe, Zambia, from a questionnaire survey of hundreds of: – maintenance mechanics and production operators; – mine specialists, supervisors, engineers and managers. • The main contributing factors to production and productivity deficits were, according to questionnaire responses (bracketed percentages): – Below target contractor performance (67%) in secondary and primary development; – Poor production forecasting, with staff (35%) citing lack of time as well as a predominant management model of activity inclined towards control (69% of responses) rather than planning (44%), organisation (54%) and leadership (51%). – Ineffective maintenance policies and strategies with planned preventive (50%) and breakdown (47%) maintenance split almost equally; – Geological activities (ore resources and reserves as well as grade control) needed urgent prioritisation, to address inadequate exploration activity and low mineable reserves as well as widespread overbooking. – Human resources skills were an issue, whereby: • Equipment/machine operator and maintenance artisanal skills were a problem. Maintenance cited poor operator and maintenance skills for 45% and 40%, respectively, of unavailable equipment; • Contractor labour was seen as a cause of poor performance across a range of activities from exploration to development and longhole drilling; and – Production and maintenance managers and supervisors did not exhibit balanced basic management skills in planning, organization, leadership, coordination and control.

This paper estimates the Cobb-Douglas aggregate production function for the mining sector in Zimbabwe over the period 1977-1997. The function incorporates technology as an explicit function of time from which the technical progress rate is extracted. The production function exhibits a significantly negative rate of technical progress and slightly decreasing returns to scale. Increasing capital stocks did not translate into positive technical progress, implying that investment concentrated on older technologies. Other possible factors include a general slow international rate of technical progress in the 1980s and the difficulty of adopting new large-scale technology in a country where mining is characteristically small-scale. The results indicate that the positive growth in mining output over the period was attributable to changes in techniques of production towards greater capital intensity. The existence of slightly decreasing returns to scale implies that there would be greater p...

Resources Policy, 2010

Chile and Peru produce almost 45% of world's mine copper output. This situation reflects their natural endowment and mining tradition, but is also the result of development processes undertaken over the last decades. As a result, both countries multiplied its mine copper production in more than 3 times in the last 20 years. Mining labor productivity played a central role achieving these amazing growth rates. Although there is a consensus about the relevance of this variable for the mining industry, the specific factors behind labor productivity changes are not completely understood. In this paper we use a panel data approach to analyze labor productivity in the copper mining sector in Chile and Peru from 1992 to 2009. This technique is consistent with heterogeneity among mines and allows us to identify, describe and analyze all the different sources behind labor productivity changes. The result of the analysis shows that better deposits and operational factors are important, but not enough to explain labor productivity improvements in the copper mining industry, and instead, company specific efforts and wide industry changes, such as technology and management innovations, are as important as the evolution of the reserve base or geological features of the operations.

As a result of Zambia's dependence on copper mining, both the falling world copper price and the possible withdrawal of investment from the mining sector might seriously threaten economic growth and stability. Accordingly, the impact of a 20 percent reduction in world copper prices and a complete collapse of the copper mining sector are modeled using a 1995 computable general equilibrium model for Zambia. Results indicate that the fall in world copper prices will place significant pressure on nonmining exports, with much of the burden of raising foreign exchange falling on the food, beverages and tobacco, and textiles and garment sectors. However, the agricultural and agro-related industries are the most export-responsive (albeit from initially low levels) to the forced depreciation of the currency.

PREM Working Paper, 2006

This paper focuses on the implications of slumping copper prices for the Zambian mining industry, in an attempt to elucidate the poor economic performance of Zambia's local economy over the last three decades. In the mining areas, copper extraction and charcoal burning constitute the main economic activities from which local dwellers derive their livelihood. A suppression of copper prices induces a relocation of labor towards informal charcoal production, depriving the local authorities from public revenues collected within the formal economy. This constrains the ability to improve labor productivity and welfare over time and simultaneously imposes pressure on the local environment through deforestation.

WIDER Working Paper, 2018

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.