In this article which focuses on economic development in mining towns, we look at Solwezi, home to one of Zambia’s biggest copper mines.

Solwezi is in North-Western province, one of Zambia’s poorest provinces: sparsely populated, very rural and with limited infrastructure. Despite improvement in recent years, typical indicators of development – such as per capita income, employment, and access to water and electricity – are all still much lower in North-Western province than in the Copperbelt.

However, Solwezi is home to FQM’s Kansanshi Mine which produces 260 000 tonnes of copper a year, nearly 40% of Zambia’s total output. As such, it is a revealing laboratory for how a mine can be a catalyst for economic development.

The first-time visitor to Solwezi is confronted by what is essentially a big, bustling shantytown forging ahead economically in a fit of chaotic, almost undisciplined, growth. The town’s energy and vibrancy are palpable, but it gets no marks for beauty.

There are many visible manifestations of Kansanshi’s presence in Solwezi, particularly in the significant infrastructure it has built, at a cost of hundreds of millions of dollars – the new airport building and runway, public roads, classrooms in government schools, market stalls for traders, and an entire purpose-built residential area, Kabitaka, where some 600 homeowners live in some of the best-constructed homes in Solwezi.

More significant, however, is the direct impact the mine makes simply by doing business. Local Solwezi companies pick up mine business worth more than $100 million every year from Kansanshi, as part of its drive to ensure that as much of its supplier spending as possible stays in the community.

But it’s the indirect influence that is the real story, for it illustrates what economists call “the multiplier effect”. Expressed simply, the economic effect of Kansanshi’s presence in Solwezi is multiplied several times over as new businesses, new jobs and new disposable income are created in areas which might not even be directly related to the mine’s activities. Just as a river in an arid region causes plants and vegetation to grow far from its banks, Kansanshi irrigates the economic landscape far from the actual mine.

The “Welcome to Solwezi” sign by Shoprite, at the airport, is the first indication: the country’s number-one supermarket would not be operating here unless there was sufficient demand from the local population. And Shoprite will soon face competition from Pick ’n Pay and other stores, as a number of mini-malls near completion. Two years ago, there were no shopping malls in Solwezi; this year, there will be five.

the-solwezi

A drive through the town shows crowded streets bustling with people, many of whom walk in the road because there are few pavements. Lining the roadside, with barely a single vacant plot between them, are all manner of small businesses, some fairly standard, but many very basic – all bustling with customers: auto-repair shops, courier companies, hairdressers, computer outlets, educational academies, funeral parlours, churches for all faiths, hotels and guest lodges, cellphone shops, and financial services companies. All the major banks are in evidence, from FNB and Barclays to Stanbic and Zambia National Commercial Bank. And countless shops are painted with MTN’s unmistakable yellow branding – the modern-day equivalent of the ubiquitous Coca-Cola signs of days gone by.

“Infrastructure and town planning have struggled to keep up with Solwezi’s runaway growth”

“Pretty”, Solwezi is not; “unruly” is more apt. Its growth seems to be of the runaway kind, where makeshift homes and informal businesses have mushroomed along with the surge in population, while infrastructure and town planning have struggled to keep up. Many of the roads have no names. The term heard most often on the ground, and even echoed in the media, is that Solwezi is “a big shantytown”. But this is just how many mining boom towns – including Johannesburg – started out. Solwezi has come a long way in a short time. While economic activity, and the disposable income it produces, will help the town through its growing pains, there is room for further co-operation between local mining companies and government to improve conditions in the medium term.

Kansanshi is not the only mine “irrigating” the economy of Solwezi; 65 km up the road is Barrick’s giant Lumwana open-pit copper mine, which started production in 2008; and a further 100 km away is Kansanshi’s “sister” mine, Sentinel, a $2.1 billion project which started production this year, and will eventually pump out 300 000 tonnes of copper at full production. When the workers and managers in these nearby mines go shopping, they travel to Solwezi.

The so-called “Solwezi effect” is noticeable because Solwezi is a small town coming off a low base; but it exists in all towns and cities where mining companies operate, such as Chingola, Kitwe, Ndola and Luanshya. Mines stimulate their local economies and drive economic growth, resulting in the creation of jobs, wealth and disposable income far beyond the boundaries of the mines themselves.