Major mining firms in Zambia said Tuesday that they may be forced to review their operations in Africa's largest copper producer if copper prices continue falling on the international market.
Copper prices on the London Metal Exchange (LME) have plummeted from a high of 10,000 U.S. dollars per ton early this year to below 7,000 per ton.
Emmanuel Mutati, the head of the Chamber of Mines of Zambia, which represents major mining houses, said if current copper prices persist, mining firms may be forced to address their operations through cutting down expenses which include labor costs.
In remarks delivered at a media breakfast meeting in the Zambian capital Lusaka, the official said the global economic downturn had affected copper prices in the past few months, which was having a negative effect on operations.
Recently, Konkola Copper Mines (KCM), one of the country's mining firms owned by London-listed Vedanta Resources Plc, wanted to lay off about 2,000 of its workforce due to increased production costs, but the move was thwarted when government intervened.
The official further reviewed that capital investments in mining operations in the southern African nation since 2,000 estimated at 8 billion dollars have led to an increase in copper production from 260,000 tons to about 700,000 tons while production was likely to increase due to ongoing expansion projects.
Africa's top copper producer estimates production to hit a high of 1.5 million tons per year by 2016, which will make it become the fourth largest world producer from the current seventh.