VZCZCXRO6552
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLS #0614 2450504
ZNR UUUUU ZZH
R 020504Z SEP 09
FM AMEMBASSY LUSAKA
TO RUEHC/SECSTATE WASHDC 7251
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/HQ USAFRICOM STUTTGART GE
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC

UNCLAS LUSAKA 000614 
 
DEPARTMENT FOR AF/S AND EEB/CBA - DENNIS WINSTEAD 
COMMERCE FOR 4510/ITA/IEP/ANESA/OA 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG ETRD EMIN EINV ELAB ECON ZA
SUBJECT: AUGUST ECONOMIC ROUNDUP 
 
REF: LUSAKA 529 
 
¶1. SUMMARY 
-- August Inflation Increases, Trade Surplus Continues to Rise 
-- South African Dairy Company Invests In Zambia 
-- GRZ To Single-Source Indeni Strategic Partner 
-- NFCA to Invest in Luanshya Copper Mines Infrastructure 
-- Chinese Food Imports Destroyed At Chirundu Border Post 
 
August Inflation Increase, Trade Surplus Continues To Rise 
 
¶2.  The annual inflation rate for August 2009 was 14.3 percent, an 
increase of 0.3 percent from July.  The Central Statistical Office 
attributed the increase to the 35 percent hike in electricity 
tariffs that took effect on August 1. 
 
¶3.  In July, Zambia recorded a K442.8 billion trade surplus. 
Intermediate goods such as copper cathodes, plates, wire and sheets 
of refined copper and Portland cement accounted for 70.3 percent of 
total exports, and capital goods such as crushing and dumping 
machinery, machinery and parts accounted for 41 percent of imports. 
 
 
South African Dairy Company Makes Initial Investment In Zambia 
 
¶4.  South African food processing giant, Clover Africa, will invest 
an initial USD 520,000 in a plan to make Zambia a regional 
processing and distribution hub.  Company projections foresee a 20 
percent market share in the first year of operation in Zambia. 
Deputy Minister of Commerce, Trade and Industry Richard Taima hailed 
the investment, which he said would increase competition in the 
dairy sector. 
 
GRZ To Single-Source Indeni Strategic Partner 
 
¶5.  On August 20, the "Business Post" quoted an anonymous Ministry 
of Energy and Water Development source who said that the GRZ 
intended to single-source a foreign strategic partner to invest in a 
30 percent share in Indeni Oil Refinery that will be offered later 
this year.  Equal partners GRZ and Total International have invested 
USD 45 million to recapitalize the refinery, and the strategic 
partner would invest a further USD 20 million.  The source noted 
that GRZ would prefer a Chinese investor. 
 
¶6.  A 2005 technical and financial audit of Indeni recommended a USD 
65 million recapitalization and refurbishment over a five-year 
period to increase the refinery's efficiency and operational 
reliability.  The audit report further recommended that the GRZ and 
Total sell at least a 15 percent share of the refinery either 
through an IPO on the Lusaka Stock Exchange or through an open 
tender process. 
 
Update of NFCA Luanshya Copper Mines 
 
¶7.  Chinese-owned Non-Ferrous Corporation Africa (NFCA), the new 
owners of Luanshya Copper Mines (LCM), announced that the company 
will spend USD 374 million to upgrade the Luanshya mine complex's 
infrastructure, including USD 74 million on its Baluba mine and USD 
300 million on its new Mulyashi mine.  Since taking over the mine in 
June, NFCA has re-hired 850 of 1,700 workers who were laid off when 
the mine was placed under care and maintenance in December 2008. 
 
Chinese Food Imports Destroyed At Chirundu Border Post 
 
¶8.  Officials from Ministries of Agriculture and Health based at 
Chirundu border post destroyed 2.5 tons of assorted Chinese 
foodstuffs in accordance with the Food and Drug Act of Zambia.  The 
foodstuffs lacked a Chinese health clearance certificate, expiration 
dates, and import certificates.  The Ministry officials impounded 
the foodstuffs after they had been cleared by the Zambian Revenue 
Authority, which is charged with checking all imports.  The 
Ministries placed agents at the border to bolster border protection 
at the beginning of 2009.  This is the first time that such action 
has been taken against Chinese imports in Zambia. 
 
BOOTH