Zambia plans to raise its stake in all foreign-owned copper mines to 25 percent from 15 percent to have a bigger say in their running and prevent mine closures, Mines and Minerals Development Minister Maxwell Mwale said.

Speaking to the Post newspaper in Zambia, Mwale did not give details of how the government would increase its stake.

It was also unclear when the new rules would be enforced.

Unions have urged the government to prevent job losses by taking a bigger stake in mining companies to exert influence and prevent mine closures.

Mwale did not explain whether the government would compensate mining companies to boost its stake in mines, or if the state would enact a new law to increase its stake.

The government's decision to increase its stake in the mines will change the scenario, giving it an upper hand to participate in the operations of the mines, the newspaper quoted Mwale as saying.

Mwale said Zambia would offer a 75 percent stake to new foreign investors bidding to run the shut Luanshya Copper Mine (LCM), which it expects to take back from its current owners by April. Companies from the UK, China and South Africa are vying to run LCM and re-open its operations.

LCM operated the Baluba copper mine and Chambishi Metals Plc, the country's largest cobalt producer, before it closed them citing losses due to to the commodities downturn.

Some major foreign companies operating in Zambia are Canada's First Quantum Minerals (FM.TO: Quote), Glencore International AG GLEN.L, London-listed Vedanta Resources Plc (VED.L: Quote) and Equinox Minerals Ltd (ric) of Australia.

Separately, Finance minister Situmbeko Musokotwane said China's plans to raise its copper imports would boost Zambia's copper production in 2009.

Notwithstanding our efforts to diversify (our economy), we will not abandon what we know best, like mining. We are optimistic with reports that China's State Reserve Bureau may this year raise purchases of copper to 1 million metric tonnes from 600,000 tonnes, Musokotwane said.

This is an encouraging signal for the Zambian mining industry, Musokotwane said.

Musokotwane said Zambia was pleased with the price of copper, which has gained about 25 percent this year after slumping 54 percent in 2008, due to the global financial crisis.

Falling copper prices hurt Zambia's economy, which depends on copper exports for 63 percent of foreign exchange earnings.

Our economy encountered unprecedented shocks over the last few months, Musokotwane said referring to mining job losses.

(Reporting By Shapi Shacinda; +260-977 843 609/260-955 779 523; Editing by David Gregorio)

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