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PREM Working Paper 06-07 - Mining in Zambia: Contemplations of Economic Development

Author(s)Elissaios Papyrakis, Sebastian Hess, Pieter Van Beukering
Co-Author(s)
Date2006-12-18
Theme(s)Policy and Trade, Forest
Method(s)Regression Analysis, Policy Instruments, Economic Modelling
Serie(s)Working Papers

Summary

This paper focuses on the implications of slumping copper prices for the Zambian mining industry, in an attempt to elucidate the poor economic performance of Zambia’s local economy over the last three decades. In the mining areas, copper extraction and charcoal burning constitute the main economic activities from which local dwellers derive their livelihood. A suppression of copper prices induces a relocation of labor towards informal charcoal production, depriving the local authorities from public revenues collected within the formal economy. This constrains the ability to improve labor productivity and welfare over time and simultaneously imposes pressure on the local environment through deforestation.

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