UPDATE 1-Zambia 9-month copper output up, to miss 2008 target

By Shapi Shacinda

LUSAKA, Dec 19 (Reuters) - Zambian copper production for the first nine months of the year rose 9.3 percent from the same period in 2007, but will not hit a full-year target due to problems in the sector, the Reserve Bank said on Friday.

"It will not be possible to achieve the 600,000 tonnes target as there have been a number of setbacks in the industry," Mines and Minerals Development Minister Maxwell Mwale said.

"But we will certainly go above the (535,000 tonnes) production level for last year."

The setbacks include a delay in commissioning Lumwana mine, owned by Australia's Equinox Minerals Ltd, until this month after a fire damaged equipment.

Officials say Lumwana is expected to produce an average of 172,000 tonnes of copper per year for the first six years of its 37-year mine life.

"The forecast was feasible before these setbacks but now we have to change it," Mwale said.

Zambia produced 419,905 tonnes of copper in the nine months to September, the central bank said. Cobalt production was 3,353 tonnes for the nine months to September, down from 3,632 tonnes in the same period last year, and cobalt exports fell to 3,423 tonnes from 3,561 tonnes.

Zambia's copper industry has been hit by lower copper prices and falling demand due to the global financial crisis. Copper fell to a new four-year low on Friday, as the weak demand outlook for metals persisted.

Mwale said Zambian mines were trying to cut costs to remain viable, but he believed production would rebound in 2009 because of investment in the copper industry by foreign mine owners.

"The managements of the mines will work on cutting the glaring high production costs and they have to take advantage of economics of scales. Otherwise the whole picture looks very good for the future, despite the setbacks," Mwale said.

Some copper mines have cut several hundred jobs triggering protests from trade unions in the copperbelt province. Mwale and Labour Minister Austin Liato held crisis meetings with mine owners this week to urge them not to cut more jobs.

Copper mining is Zambia's economic lifeblood and the copper mines are a major employer in this southern African country of 12 million people.

(Editing by Sue Thomas) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/) Keywords: ZAMBIA MINING/

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