Local Employment Effects of Falling Copper prices: A Case study in the Copperbelt province of Zambia.

Abstract

Zambia is heavily dependent on copper, and a typical example of a country subject to the natural resource curse. From 2011 until 2016, the copper price fell from around $9,900 to $5,660 per metric tonne (mt). In this thesis, we examine the relationship between the falling copper price and employment opportunities in the Copperbelt region of Zambia, both in the large mines and further down the supply chain, among the Zambian small and medium-sized enterprises (SMEs) active in the Copperbelt. We use regression analysis on panel-type employment data and questionnaire data, self-collected during a field study in April and May of 2017. We also use graphical visualisation of employment data and anecdotal evidence from interviews for contextual understanding and framing of our regression result interpretation. We find that the falling copper price reduces employment in the mines, and that the effect seems to be stronger for contract-style employees than permanently employed labourers. SMEs who have a larger share of mining clients are more likely to have reduced profits since the start of the copper price fall, but all SMEs across the Copperbelt have generally felt a downturn in their business. There seems to be a critical price point of around $4,000 to $5,000 per mt of copper when the employment starts to drop rapidly.