LUSAKA (Reuters) - China Nonferrous Metal Mining (CNMC) plans to invest $600 million in Zambia between 2010 and 2011, encouraged by the country's abundant mineral resources and political stability, company president Luo Tao said.

Luo said the money would be used to buy new mining equipment, develop a new copper mine, expand an existing copper mine and smelter facility, develop a tax-free economic zone and expand a copper processing plant.

"We will begin the investment of $600 million soon and hope to finish this investment by next year," Luo said late on Monday during the signing of an agreement with the government for the joint development of a planned project to recover residue copper in tailings dams.

Luo said $300 million would go to the Luanshya copper mine, which CNMC took over last year, and most of that money would be spent on developing the Mulyashi copper project.

According to official data, CNMC plans to start developing the Mulyashi copper mine this year after approving a feasibility study and production is expected to begin in 2012 with output projected at about 60,000 tonnes of copper a year.

"The other $300 million will be invested in projects such as the planned expansion of the Chambishi copper smelter in the Zambia-China economic zone," he said.

China is the world's largest consumer of copper and Zambia is Africa's biggest producer of the metal.

Luo said CNMC had over the last 12 years invested $1 billion in Zambia and would spend $5 million on feasibility studies to establish whether it was viable to recover the residue copper in the Mufulira tailings dams.

CNMC would invest more in Zambia because of its rich mineral resources and political stability, Luo said.