Mining Collapse Cripples Africa’s Dreams of Prosperity – by Patrick McGroarty and Joe Parkinson (Wall Street Journal – March 4, 2016)

http://www.wsj.com/

Zambia faces economic and social crisis as copper prices plunge and foreign investment from China wanes

KITWE, Zambia—A decadelong commodity boom brought sleek shopping malls, tidy brick homes and dozens of private schools to this palm-pocked mining town in the heart of Africa.

The population doubled and incomes soared as record copper prices and a flood of Chinese investment and workers transformed a region bordering war-ravaged Congo into a beacon for Africa’s rising middle class.

Now the global forces that propelled Kitwe’s rise have reversed, fomenting an economic and social crisis that has interrupted dreams of greater prosperity across Zambia’s copper belt and exposed the fragility of Africa’s commodity-fueled growth model.

Slowing Chinese demand has nearly halved the price of copper in two years, upending an economy reliant on the metal for 70% of its exports. Chinese contractors and restaurateurs that followed state construction companies into the landlocked country are starting to head home.

Zambia’s kwacha currency is one of the world’s worst performers, losing half its value last year. In desperation, President Edgar Lungu has asked for divine intervention, decreeing nationwide days of prayer to resurrect the stricken economy.

Kitwe is a prime victim of the commodity bust’s outsize impact on Africa. Several mines have closed and some 15,000 workers have been laid off, with thousands more expected. Officials say each miner’s salary supports 15 dependents, exposing the entire town to the ravages of the global rout.

For the rest of this article, click here: http://www.wsj.com/articles/mining-collapse-cripples-africas-dreams-of-prosperity-1457104328

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