Problem copper industry poses challenge for Zambia's new leader

Mon Jan 19, 2015 9:40am EST
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* Zambia to choose new president Tuesday after Sata's death

* Mainstay copper industry hit by price drop, tax row

* Foreign mining firms threaten to shut shafts

* IMF says public spending must be reined in

By Joe Brock

NDOLA, Zambia, Jan 19 (Reuters) - Zambia's copper industry, the spluttering motor of one of Africa's fastest-growing economies, has been at the heart of campaigning for Tuesday's presidential election and poses a big headache for the country's next leader.

Hit by plummeting metal prices, accusations of corruption and a hike in taxes, mining companies say production and jobs are at risk unless the new president steps in.

The premature election comes after the death of Michael Sata, leader and founder of the ruling Patriotic Front (PF) party, who died in office aged 77 in October. His replacement Edgar Lungu, a 58-year-old lawyer, is seen as the favourite over Hakainde Hichilema, 52, a cattle herder-turned-economist whose United Party for National Development has been wooing the middle-class and investors.

Zambia averaged 6-7 percent growth over the last decade as the mining sector boomed. But that slowed to 5.5 percent last year, the IMF estimates, due partly to lower revenues from copper after prices hit their lowest since 2009.   Continued...