ZAMBIA NOVEMBER ECONOMIC NEWS ROUNDUP

UNCLAS SECTION 01 OF 02 LUSAKA 001627

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E.O. 12958: N/A
TAGS: ECON EINV EAIR PGOV ZA
SUBJECT: ZAMBIA NOVEMBER ECONOMIC NEWS ROUNDUP



1. SUMMARY OF TOPICS

-- China forgives Zambian debt, signs smelter deal
-- Konkola Copper Mine spill pollutes Kafue River
-- Two-thirds of Zambians lack access to financial services
-- Time to register a company with PACRO down to one day
-- Chilanga Cement launches construction of new plant


2. China forgives Zambian debt, signs smelter deal

President Mwanawasa announced on November 7 during a visit to
Beijing for the Sino-African Summit that the Chinese government had
written off USD 211 million of debt owed by the Zambian government,
including debt that Zambia incurred in the 1970s to build the TAZARA
railway line.

On the margins of the Sino-African Summit in early November, Zambia
and China signed a memorandum of understanding for the construction
of a copper smelter by Chambishi Non-Ferrous Company, with a
reported investment of USD 200 million.

Source: Zambia Daily Mail, November 9, 2006


3. Konkola Copper Mine spill pollutes Kafue River

Zambia's largest copper mine, Konkola Copper Mine, owned by
UK-Indian company Vedanta Plc, spilled highly acidic pollutants into
the Kafue River in Chingola in North-Western Province after a pipe
at a leaching plant burst on November 6.

Residents who used the polluted water suffered from diarrhea, rashes
and other ailments. Local water companies turned off water as soon
as the contaminants were detected, causing further hardship to the
affected area for several days. Mines and Mineral Development
Minister Kalombo Mwansa visited the affected area on November 9 and
said he was impressed by how KCM had mobilized equipment at short
notice and made progress in dredging silt material. Minister of
Tourism, Environment and Natural Resources Kabinga Pande issued a
statement on November 14 that blamed KCM's negligence in failing to
replace old pipes as the cause of the spill. He said that an
Environmental Council of Zambia inspection of KCM in mid-2006 turned
up problems and KCM was given a deadline of December 31, 2006 by
which to come into full compliance with environmental requirements.
KCM was allowed to resume copper processing operations on November
17 after the ECZ determined it had put sufficient clean-up measures
into place.

Source: Times of Zambia, November 8-18, 2006
http://www.zambia.co.zm

4) Two-thirds of Zambians lack access to financial services

According to a nationwide survey conducted by FinScope Zambia and
funded by UK and Swedish development agencies, two-thirds of
Zambians do not have access to formal or informal financial
services, only 14.6 percent of Zambians have a bank account, and
only 7.5 of the adult population use automated teller machine (ATM)
cards. The reasons cited for lack of access included the physical
distance to banks and high minimum balance requirements for
establishing accounts. Over half of the 4,000 people surveyed said
that they would like access to banking services.

Source: The Post, November 9, 2006


5. Time to register a company with PACRO down to one day

Thanks to technical and material support from the Millennium
Challenge Account Threshold Program, the Patents and Companies
Registration Office (PACRO) has installed an automated system that
reduces the time required to register a company from nine to
fourteen days to just one day. According to the registrar of PACRO,
the new automated system will also reduce costs of registering a
business and enhance transparency in the way PACRO operates. PACRO
also plans to decentralize the company registration process, by
introducing automated registration systems in Ndola, Copperbelt
Province; Livingstone, Southern Province; and Chipata, Eastern
Province, by March 2007. PACRO registrar Anessie Banda-Bobo, Acting
Secretary of Commerce, Trade and Industry Felix Mutati, and

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Secretary to the Treasury Evans Chibiliti joined Ambassador Carmen

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Martinez and USAID Mission Director Jim Bednar in a ribbon-cutting
ceremony on November 9 to inaugurate PACRO's new, fully-automated
customer service center.

Source: The Post, November 10, 2006; U.S. Embassy Lusaka website


6. Chilanga Cement launches construction of new plant

President Mwanawasa laid the foundation stone for a new USD 120
million cement plant that is being built for Chilanga Cement, a
subsidiary of French-owned LaFarge. A Chinese company, CBMI, which
works with LaFarge in China and France, received the contract to
build the modern, environmentally-friendly plant to replace Chilanga

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Cement's 1948-vintage plant. Seven cabinet Ministers, other VIPs,
and business representatives also attended the opening ceremony on
November 22. When completed in 2008, the "Tukule project" will
produce 80,000 bags of cement (2,000 tons) per day, doubling
Chilanga's current production capacity. In his remarks at the
event, the President urged Chilanga Cement to reduce the cost of
cement, so that prices remained affordable for Zambian citizens, and
to spur more construction. He also challenged Chilanga's management
to assist the compound community near the factory by building and
improving housing.

Source: Times of Zambia, November 23, 2006; Embassy Commercial FSN
observations

MARTINEZ