VZCZCXRO8506
PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLS #0372/01 0880816
ZNR UUUUU ZZH
P 290816Z MAR 07
FM AMEMBASSY LUSAKA
TO RUEHC/SECSTATE WASHDC PRIORITY 4179
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 LUSAKA 000372 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV EAIR ZA
SUBJECT: ZAMBIA MARCH 2007 ECONOMIC ROUNDUP 
 
SUMMARY 
 
-- MALAYSIAN TRADE MISSION TO ZAMBIA 
-- EQUINOX ACQUIRES EQUIPMENT FOR LUMWANA COPPER MINE 
-- GEMSFIELDS SELLS EMERALDS FOR OVER USD 1.0 MILLION 
-- NAMIBIA BUYER/SELLER TRADE MISSION 
-- BIO-FUELS POLICY TO BE ENACTED SOON 
-- REGIONAL AIRLINE LAUNCHED IN ZAMBIA 
-- FIRST EVER CORPORATE BOND ISSUED IN ZAMBIA 
 
1) Malaysian trade mission to Zambia 
 
A delegation from Malaysia visited Zambia in mid-March to identify 
investment opportunities. Delegation leader Tan Sri Dato Soong, 
chairman of the Malaysia South-South Association, told journalists 
that Malaysia seeks to collaborate with Zambia in joint ventures 
that include manufacturing of cold roll steel sections for furniture 
and housing.  The team would also like to cooperate in manufacturing 
coke-fired cupola for cast iron industry, agricultural processing 
machinery, and paint, as well as solar energy driven motor pumps. 
Malaysia is exploring export opportunities for palm oil mill 
machinery, steel components for furniture and housing, and 
re-treaded tires for passenger cars and heavy trucks.  The team was 
also looking for joint ventures with government agencies and 
cooperation needing services of information technology, importers, 
retailers and distributors. 
 
The Malaysian team visited Livingstone to meet the business 
community and discuss investment possibilities, which may include 
joint ventures in university and hotel construction.  Other sectors 
of interest to the delegation included banking, steel manufacturing, 
agriculture equipment, and palm oil production. 
 
Delegation leader Soong said Malaysia was interested in setting up a 
Multi-facility Economic Zone in Lusaka with the support of the Japan 
International Cooperation Agency (JICA) and the Triangle of Hope 
Initiative.  The Zambian government is currently working with JICA 
and a Malaysian consultant to replicate the Malaysian experience. 
The delegation signed an agreement to set up a mobile phone 
manufacturing plant with a local company as well as an engineering 
college.  The delegation also signed a memorandum of understanding 
with Zambia Telecommunication Company Limited (Zamtel) to improve 
their service provisions. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm 
 
2) Equinox acquires equipment for Lumwana Copper Mine 
 
Craig Williams, Equinox President and Chief Executive Officer, 
announced in a press statement to the Times of Zambia on March 21, 
2007 that Equinox Minerals Limited acquired a Semi Autogenous Grind 
(SAG) mill worth USD 30 million for its Lumwana Copper Mine project 
in Solwezi.  The basic design of the SAG mill was an adaptation of a 
similar mill currently in operation at Escondida mine in Chile.  The 
mill is designed to process 2,450 tones of copper ore per hour with 
an annual rate of 20 million tons. The plant will also grind up to 
200 tons of 100mm and 125mm mill steel balls.  The machinery 
manufactured by Gandara Censa in Spain is 38 feet in diameter and 20 
feet in length, with installation power of 18 megawatts.  The 
equipment is currently being installed at Lumwana Copper Mine in 
Solwezi. 
 
Construction of Lumwana mine is on schedule for commissioning in the 
second quarter of 2008.  It is anticipated that, once operational, 
Lumwana mine will produce an average of 169,000 tons of copper per 
annum contained in concentrates for the first six years of its 
expected 37 year mine lifespan. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm 
 
3) Gemfields Mine sells emeralds for over USD 1.0 million 
 
Gemfields Company chief executive officer Richard James told 
Rapaport News on March 9, 2007, that Gemfields Resources Plc and 
AIM-listed junior mining company (AIM is the London Stock Exchange's 
international market for smaller growing companies) had completed a 
sale of USD 1.028 million worth of emeralds totaling 385,035 carats 
from the company's Mbuva-Chibolele mines in the Ndola rural 
district.  The buyers were from Israel and India.  This was the 
company's second sale; the first, in November 2006, took in 
approximately USD 770,000.   James said that the second sale earned 
a 57 per cent higher value as the stones were extracted from deeper 
within the mine. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm 
 
4)  Namibia buyer/seller trade mission 
 
The USAID-funded Market Access Trade Enabling Project (MATEP) 
project and Zambia Development Agency (ZDA) held a Zambia Trade 
Exhibition at Safari Court Hotel in Windhoek, Namibia on March 23, 
 
LUSAKA 00000372  002 OF 003 
 
 
¶2007.  About 30 companies took part in the buyer/seller trade 
mission to Namibia.  External trade between the two countries 
includes Namibian exports of copper ore and concentrates, 
electricity, cotton seed, timber, oil cake and sorghum.  Zambian 
products with potential in the Namibian market include honey, 
coffee, sugar, mealie meal, flour, essential oils, cement, and 
textile products. 
 
The event was officially opened by Namibian President H. Pohamba and 
Zambian President Mwanawasa.  President Mwanawasa disclosed that a 
joint committee on trade was already in place and was working to 
establish a bilateral trade agreement between the two countries.  He 
used the occasion to woo Namibian investors to come to Zambia.  The 
coming months will give an indication of the effectiveness of this 
trade mission. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm 
 
5)  Bio-fuels Policy to be enacted soon 
 
The GRZ finalized a national bio-fuels policy after wide 
consultation with stakeholders.  The policy was submitted to Cabinet 
Office for approval and launch.  The bio-fuel policy aims to 
facilitate the production of ethanol in Zambia, and provides 
guidelines on how stakeholders in the industry will operate. 
Minister for Energy and Water Development Felix Mutati said in an 
interview that the Bio-Fuels Act will also define standards in terms 
of production, distribution and cost.  It will also address issues 
such as the mixing of bio-fuels with other fuels such as petrol and 
diesel during production, and adding value to the by-products. 
 
The enactment of the policy will enable companies such as Zambia 
Sugar to commence the production of ethanol from sugar cane, which 
is one of the major raw materials.  Zambia Sugar Plc managing 
director Paul de Robillard said the company has the capacity to 
produce up to 13 million liters of ethanol at present sugar 
production levels.  This production represents 15 per cent of 
Zambia's total petrol consumption.  Zambia Sugar will also use the 
waste after juice had been extracted from the cane to produce 
electricity. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm 
 
6) Regional Airline launched in Zambia 
 
Sefofane Air Charters was launched on March 23, 2007, following the 
issuance of a license to start operations in Zambia by the 
Department of Civil Aviation.  Chief Executive Officer Mr. Neil 
Lumsden said Sefafane would be primarily engaged in servicing the 
tourism industry as well as flying corporate and government clients. 
 The company would like to explore new challenges and opportunities 
in the Zambian aviation industry. 
 
In Zambia, the airline will operate charter flights to South Luangwa 
National Park, Kafue National Park, Livingstone, and Lusaka.  Three 
planes have been acquired that will service tourist sites. 
 
Sefofane Air Charters was established in 1991 in Botswana and has 
operations in Namibia, Malawi, South Africa and now Zambia.  The 
company has 43 aircraft and over 50 pilots, and owns a maintenance 
business with approximately 10 full-time engineers.  The Zambia 
office will be headed by Mr. Nixon Chimuka as General Manager and 
the Chief Pilot is Mr. Kipe Mudenda. 
 
Source: www.zamnet.zm; www.postzambia.com 
 
7) First-ever Corporate Bond issued in Zambia 
 
The Development Bank of Zambia (DBZ) successfully issued a K150 
billion (USD 36.6 million) corporate bond, called a domestic Medium 
Term Note (MTN) program, with Standard Chartered Bank that is 
expected to help accelerate development of the local corporate bond 
market.  The MTN program will provide capacity, flexibility to 
increase funding of medium term loan portfolio, room for continued 
pursuit of profitable growth and expansion of business.  The 
transaction represents the first time in the history of Zambian 
capital market that a domestic Zambian kwacha program has been 
established, and is the largest single issue to be offered to 
institutional fixed income investors.  This information was 
contained in a joint statement issued by Standard Chartered Bank and 
Development Bank of Zambia. 
 
An initial tranche of five-year unsecured bonds due in February 2012 
was issued by DBZ on February 28, 2007 for K68.620 billion (USD 16.7 
million), with interest payments on this tranche to be made on a 
floating basis.  Although the bond will be redeemed in 2012, 
investors will still get interest called coupon twice yearly before 
the bond matures. 
 
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm 
 
 
LUSAKA 00000372  003 OF 003 
 
 
PASSEN