Zambia's copper cathode output is forecast to rise to 600,000 tonnes this year from 521,984 tonnes in 2007 while smelter capacity will jump in the next three years, mines minister Kalombo Mwansa said on Wednesday.

Mwansa said the country's two largest copper producers, Mopani Copper Mines (MCM) and Konkola Copper Mines (KCM), are both increasing their smelter capacity while a new smelter is being built by Chinese investors to meet growing output.

We expect an increase in the levels of copper production to around 600,000 tonnes this year because most mines have raised their output and some new mines will start to operate in the year, Mwansa told Reuters in an interview.

Mwansa said two new mines would start production and a third had advanced in construction works to raise output while more copper exploration took place in various parts of Zambia.

Mwansa said Australia's Equinox Minerals Ltd. , would start copper production at its Lumwana mine, while South African-based Teal Mining would also commence production at Mwambashi mine. A smaller mine known as Kashime was also due to start production in central Zambia.

KCM and Mopani have both increased their smelting capacity and we expect that capacity will reach 900,000 tonnes of copper in three to four years' time when we anticipate our output to be more than 1.0 million tonnes of copper (cathode), Mwansa said.

Mining experts say Zambia is partly increasing its smelter capacity to meet a growing demand by miners in the Democratic Republic of Congo (DRC) to use its smelting facilities.

Mopani is a joint venture of Swiss-based Glencore International AG and Canada's First Quantum Minerals , while KCM is majority owned by London-listed Vedanta Resources .

China's Non-Ferrous Metals Corporation (CNMC) is currently building a copper smelter in the mineral-rich Copperbelt region, which will be used to process copper for the Chinese-owned Chambishi copper mine and other units, Mwansa added.

He said exploration in eastern Zambia and central parts of Zambia had also shown good signs of copper.


Mwansa said the government would discuss new mining taxes with two mines that have asked for an explanation on how the new windfall mining tax of a minimum 25 percent and variable profit tax of 15 percent would be levied.

There are a few concerns on how these taxes will be implemented and we will dialogue with two mining companies that want an explanation as they fear the taxes will affect their profits, Mwansa said.

Mwansa did not say whether the government would have to waive some of the taxes.

In April, Zambia introduced a variable profit tax of 15 percent on taxable income above the first eight percent which is tax free.

It also raised corporate tax to 30 percent from 25 percent and increased mineral royalty to 3.0 percent from 0.6 percent.

The new taxes effectively increased mining taxes to 47 percent from the previous 31.7 percent, starting from April.

Copper mining is Zambia's economic mainstay and the vast copper mines are a major employer in this southern African country of 12 million people. (Reporting By Shapi Shacinda; editing by James Macharia and Peter Blackburn)