Mining giant Anglo American is to pull out of its Zambian copper mining operations.

The Zambian government has sought to reassure the company's 10,000 workers that their jobs are safe.

Anglo American says the low price of copper on world markets left it with no choice but to quit Zambia.

Anglo American insists the decision - which comes a few weeks after December's contested election - is not political.

"The problems we are suffering predate the election...We are obviously acutely aware of the social and economic impact of the closure of these mines on the Zambian copper belt," Simon Thompson, chairman of KCM, which ran the mines, told the BBC's World Business Report.

Levy Mwanawasa was elected president in late December, and the opposition candidate Anderson Mazoka - previously chief executive of Anglo American in Zambia - is contesting the results.

Anglo American owns 50.9% of Zambia Copper Investments, which owns 65% of Konkola Copper Mines - the largest copper mining operation in Zambia.

Running out of money

Falling copper prices has not only made the business less profitable but also made it more difficult to raise extra project finance, Thompson said.

Anglo's original investment will be exhausted in the second quarter of this year, with other reports suggesting that the project needed a further $1bn in investment.

Anglo may sell the Konkola mines, transfer the assets as a going concern or close them down completely.

This last option is one the government - and Anglo - will seek to avoid.

"The government fully understands that this is a business decision which has been dictated by economic considerations and would like to state that mines which are operated by KCM will not be closed and that the employees of KCM should not panic," the government said in a statement.

Failed privatisation?

With copper production falling across Zambia, Konkola was seen as representing a chance for revitalisation of the economy and the copper industry.

Copper is Zambia's main hard currency earner, and KCM is one of the country's largest private employers.

Foreign donors pressured the government to privatise the mines in the 1990s after decades of decline.

Many Zambians may now see the Anglo American decision as a sign that this privatisation process has failed.

If foreign currency earnings fall, this could shake the local currency, the kwacha, and reduce the country's reliance on foreign aid.