BMI's Executive Summary

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The southern African state of Zambia enjoys a vast endowment of metals, gemstones, industrial minerals and potential energy resources including coal, hydrocarbons, and more recently, uranium. For several years now, Zambia's economy has been greatly dependent on mining, particularly on copper, cobalt and zinc – these metals still account for nearly 85% of the country's export earnings. Globally, the country ranks seventh in the production of copper and second in cobalt. Further, exploration of the Zambian Copperbelt area since the 1930s has led to the discovery of many other metalliferous and nonmetalliferous resources.

The Zambian state has adopted a mineral policy designed to augment investments in the mining sector and ensure its transition into a self-sustaining mineral-based industry. As part of this, state-owned mining companies have been actively privatised since the year 2000 – particularly in the copper segment. As a result of these efforts, Zambia is widely rated a low-risk investment destination and has attracted high levels of foreign investment in recent times. The government recently concluded drafting a revised mineral empowerment policy that aims to stimulate greater participation of Zambian nationals in their vast mining industry. The government also plans to develop large mining assets in all major provinces to create greater employment opportunities. This would address growing concerns about uneven distribution of mining wealth.

Investments in Zambia's mining industry for the year 2007 are expected to cross US$1bn – the highest in many years. However, rising costs pose a serious threat to the performance of the Zambian mining industry. Low ore grades, high fuel and electricity costs as well as inadequate transport facilities have been major bottlenecks for the domestic mining industry.

Industry Forecast

According to BMI, the mining industry of Zambia is forecast to grow 9.87% y-o-y in 2007, contributing 16.48% to the GDP. Over the 2007-2011 forecast period, the Zambian mining industry is likely to average annual growth upwards of 8% to reach a value of US$1.79bn by 2011.

Chapter 1 - Executive Summary

Chapter 2 - Industry Trends And Developments

Market Overview

Regulatory Structure

Chapter 3 - Project And Property Updates

Metals

Minerals

Precious Stones

Table: Mines In Zambia

Chapter 4 - Business Environment

Introduction

Regional Overview

Table: Regional Ave. Scores 1

Zambia: Business Environment Ranking

Table: Zimbabwe Business Environment

Chapter 5 - Industry Forecast Scenario

Metals Price Outlook

Risks To Outlook

Global Industry Overview

Regional Analysis

Zambia Mining Industry Forecast

Table: Zambia Mining Industry Forecast

Chapter 6 - Competitive Landscape

Chapter 7 - Company Monitor

Zambezi Nickel

Metorex

First Quantum Minerals

Chapter 8 - Appendix A: Mining Ratings: Methodology

Introduction

Breakdown of Ratings

Breakdown Of Components

Chapter 9 - Appendix B: The World Economy

Outlook And Risks

Table: Global Assumptions

United States

Soft Landing Ahead

Risks To Outlook

Europe

Moderating, But Solid Economic Growth

Medium-Term Growth Outlook

Japan

Japan In 2007 & 2008

Japan’s Medium-Term Prospects

China

China In 2007 And 2008

China’s Medium-Term Prospects

Commodities

Correction To Continue

Lower Metal Prices, But Still Historically High

Risks To Outlook

Oil

Chapter 10 - Appendix C: Regional Demographic Data

Table: The Long View: Data Over The Economic Cycle (2000-2007)

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn