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Lumwana copper mine: a growth catalyst for local communities

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Lumwana copper mine: a growth catalyst for local communities

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  •  Date: 10 August 2010

Extractive industry and mining projects are complex and challenging. They can also add value to indigenous natural resources, increase export revenues and generate fiscal income for the countries where they are located. Lumwana, a new copper mine in the north western province of Zambia constructed and operated by Equinox Minerals Limited, with the support of the European Investment Bank offers a striking example. Last year alone, it produced 109 000 tonnes of copper and provided direct and indirect employment to some 3000 Zambians.  

In very small quantities, it is an essential element of a healthy diet, keeping us up and about. In greater amounts, it makes our lives easier, notably thanks to its power transmission properties. Copper is everywhere: in our houses, cars, mobile phones, water pipes, and - even - art pieces. To meet the ever growing demand for copper, fuelled - amongst other - by the expansion of the Chinese economy, additional supply is needed.

Equinox Minerals Limited, an international mining company and its subsidiary, Lumwana Mining Company Limited, decided to take up this challenge, overcoming the financial and technical difficulties linked to constructing and operating a large new copper mine in Zambia.

A project supported by key lending institutions

The ambitious project was initiated back in 2001, with the early support of the European Investment Bank, a co-financier of its comprehensive USD 13.5m feasibility study. The conclusions of the study were positive, generating momentum at a time when copper projects were held back due to low copper prices. The project literally kicked-off in 2006, following the closing of a complex financial package involving, alongside the EIB, a large number of lending institutions and multilateral stakeholders including the African Development Bank, KfW, the German development agency and FMO the entrepreneurial development bank of the Netherlands. The support of such partners proved paramount to raise the funds suited with the long term nature of the initiative and to design the project according to best practice.

Targeting community relations and development 

The project, located in the North Western Province of Zambia, is quite remote from the traditional copper production region of the country, the "Zambian Copperbelt". The province was, until recently, characterised by very limited economic activity and the Lumwana mine is already generating far-reaching benefits for the local population and the country.

Along the lines of the country's Poverty Reduction Strategy, the project supports the diversification of the mining sector into new regions, private sector development, and local value added and export growth.

The promoter, with the support of the Zambian Government, helped rehabilitate roads, expand electric power supply and enhance water facilities. Such infrastructure developments are essential to stimulate the economic growth of this landlocked and least developed country.

The mine, by providing training and employment to over one thousand Zambians, encourages the empowerment of the local community. Further opportunities will emerge, notably linked to supporting mine operating activities.

In addition, the Lumwana Property Development Company, a sister company of Lumwana Mining Company, is constructing a new town adjacent to the project incorporating water, power and sanitation infrastructures to accommodate mine employees and their families.

Five thousand people are already living in the town which in its first phase comprises around 1,000 houses, commercial and retail areas, schools as well as sporting and healthcare facilities. The local population is also encouraged to purchase its own home through a home ownership scheme with a subsidised mortgage provided by Lumwana Property Development Company.

Lumwana: a copper mine stimulates local economic growth in Zambia

Lumwana is a copper mine located in the north western province of Zambia. Built and operated by Equinox Minerals Limited, an international mining company and its subsidiary, Lumwana Mining Company Limited, it produced in 2009, 109 000 tonnes of copper in the form of concentrate which is mostly smelted and refined in Zambia. The project started in 2001 and has provided direct or indirect employment to some 3000 Zambians. It has also given birth to a new town made of 1,000 houses, commercial and retail areas, schools and healthcare facilities. Ralph Gibson, Vice President at Equinox Minerals Limited tells us about this success story.



A particular attention paid to environment

Mining can be destructive for the environment. In order to ensure the safety and environmental friendliness of the Lumwana project, a comprehensive Environmental and Social Impact Assessment (EIA) aligned to the United Nations Economic Commission for Europe-UNECE Aarhus Convention was carried out. Such an assessment is required for all mining projects with a significant impact on the environment that the European Investment Bank finances.

Throughout the process leading to its adoption by the Zambian Government, local authorities and communities were consulted, contributing to generating wide local support. As a result, the project complies with EU environmental policies and the World Bank's Equator Principles.


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