DESPITE massive challenges facing the mining sector compounded by a slump in commodity prices, the mining sector will continue contributing significantly to the country’s economic development.
In the latest seventh Extractive Industries Transparency Initiative (EITI) Zambia report launched in Kitwe on July 22, 2016, the extractive industry’s contribution to the treasury increased to K9.95 billion in 2014 from K8.21 billion in 2013.
Out of the total amount, copper and cobalt producers contributed K8.10 billion representing 92.58 per cent with cement producers adding K460 million representing 5.31 per cent while the other extractive companies poured in K180 million at 2.11 per cent to the national treasury.
In the stated period, Kansanshi Mines contributed 32.96 followed by Mopani Copper Mines (MCM) at 11.51, First Quantum 9.70,  Konkola Copper Mines (KCM) contributed 8.37, with Kalumbila Mine contributing 7.58 per cent of the five biggest contributors.
Surprisingly, while contributing 32 per cent to the overall Government revenue, it only contributed six per cent to the Gross Domestic Product (GDP), 1.7 per cent in terms of employment and a
paltry 1.7 per cent investment.
In terms of exports, the extractive sector played a bigger role contributing as high as 77.65 per cent in the period under review.
EITI Zambia communication officer Ian Mwiinga said the think-tank is impressed by improvements in companies’ response during data collection.
“Mining and other extractive companies are now seeing the value of being transparent, we recorded 95 per cent in terms of responses which is encouraging,” he said.
He added that Maamba Collieries remained the sole producer of coal in the country producing 159,151 tonnes with gold production reducing to 4,807 kilograms (Kgs) in 2014 from 4,934 Kgs in 2013.
The launch attracted representation from a cross section of the Copperbelt community representing the civil society, trade unions, academia as well as Government.
Some stakeholders still think the mines’ contribution to the GDP is still minimal.
Joseph Bwalya, a Ndola based former miner says the contribution by the mining houses to the GDP calls for diversification of the economy.
“The percentage of mining contribution to the GDP is small compared to other sectors of the economy which we rarely talk about,” Mr Bwalya says.
In response Mr Mwiinga urges stakeholders not to look at mining based on copper production alone but the whole extractive sector.
“We have to look at sand mining, quarrying and cement manufacturing and see how the entire extractive sector’s contribution to the economy, and not forgetting the supply chain, the sector has been offering,” he said.
As for the Zambia Chamber of Mines (ZCM), the mining sector’s contribution is immense but that the full potential of the sector has not been realised due to the country’s low manufacturing base.
Acting chief executive officer Talent Ng’andwe said more efforts should be made to expand the local manufacturing base.
Mr Ng’andwe said stakeholders should not base their judgment on the mines contribution to the GDP alone but look at the bigger picture.
He said contrary to the public view that mines’ contribution to the economy was minimal; it supported a cross spectrum of sectors through supply and contracting linkages.
Mr Ng’andwe explained that apart from contributions the economy, mining companies commit to the national treasury through various taxes and that a lot of money was being spent on local mining suppliers and contractors.
He reminded stakeholders that the recent reports by cooperating partners indicated that US$3 billion to US$5billion had been spent on local supplying and contracting jobs.
“Mining houses are spending a lot on local suppliers and contractors, although there is need to strengthen the country’s company law, it is very weak.
“According to the company law anyone who registers a company, it is treated as local entity hence making it difficult to distinguish between an indigenous and a foreign company,” Mr Ng’andwe said.
To increase the sector’s contribution to the economy, the Emerald and Semi-Precious Stones Association of Zambia (ESMAZ) thinks diversifying the gemstone auctioning will unlock the potential of the natural resource.
Association vice treasurer Moffat Mukwala said big gemstone mining firms were ignoring western markets at their disadvantage.
“We don’t see companies exploiting markets like the United States of America (USA), Canada and Switzerland’s Geneva that are yearning for more gemstone auctioning which might be more viable than the Singapore markets,” Mr Mukwala said.
He projected that the next big revenue source will be gemstones looking at the potential especially that the prices of the precious stones had not been affected by the low global commodity.
Mr Mukwala further accused large gemstone operators in the country of collusion in a bid to wipe-out small dealers by refusing partnerships while opting for buy-offs.
“Partnerships between big gemstone mines and the small scale have been difficult because it is like they (big gemstone mines) want to remain in business by buying off most of the licenses instead of partnering with the local dealers and run the mines alongside,” he said.
With inputs from all stakeholders, solutions  will be found for the country to reap more benefits through mining linkages.