20091208

LUSAKA (Reuters) - Zambia, Africa's top copper producer, faces an uncertain long-term mining outlook despite a resurgence in copper prices and government assurances of stable mining taxes in 2010, an industry official said on Tuesday.

Frederick Bantubonse, general manager of the Chamber of Mines of Zambia, which represents foreign mining companies, said the country's foreign mining investors were still sceptical about its mining prospects.

"The long-term outlook for copper mining in Zambia is still very uncertain despite assurances by the government. Investors don't have sufficient confidence," Bantubonse told Reuters in an interview.

Zambia abolished long-term development agreements it signed with mining companies last year and raised taxes, sparking protests among foreign mining companies.

However, the government scrapped the high mining taxes earlier this year to keep afloat mining projects following a fall in metal prices, amid criticism from the International Monetary Fund and World Bank, who said the country should not have dropped a 25 percent mineral windfall tax.

Bantubonse said the government needed to give foreign investors stable long-term agreements to restore confidence and boost output.

"To restore investor confidence, there is need to look at the laws, and that we haven't done yet."

He said there was insufficient liquidity in capital markets and borrowing was still difficult and expensive for mining companies wishing to invest in Zambia and other countries.