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Zambia to establish investment vehicle for 30% stake in critical minerals mining
Zambia is poised to create an investment vehicle aimed at owning a minimum of 30% of production from critical minerals in its burgeoning mining sector.
A mining wagon underground in the Henderson shaft at the Mufulira mine, operated by Mopani Copper Mines Plc, in Mufulira, Zambia, on Friday, May 6, 2022. Photo Credit: Zinyange Auntony/Bloomberg
Zambia is poised to create an investment vehicle aimed at owning a minimum of 30% of production from critical minerals in its burgeoning mining sector.
According to the report by Bloomberg, Mines Minister Paul Kabuswe presented this initiative on Thursday, August 29, highlighting the nation’s objective to optimise the advantages derived from its extensive deposits of essential metals, particularly as they relate to the global energy transition.
As the second largest copper producer in Africa, Zambia has set ambitious targets to increase its copper output significantly, seeking to quadruple production by the early 2030s. In addition to copper, Zambia boasts rich deposits of cobalt, graphite, and lithium, which are increasingly vital in modern technology and renewable energy solutions.
Under the proposed framework, the government will establish a special purpose vehicle designed to invest in these critical minerals, implementing a production sharing mechanism that guarantees a baseline of 30% of output from new mining ventures. This strategic development was detailed in a document released by Minister Kabuswe in Lusaka, the country’s capital.
Several significant mining firms, including Barrick Gold Corp., First Quantum Minerals Ltd., and China Nonferrous Mining Corp., are currently investing in copper projects within Zambia. The government is counting on enhancements at the Konkola and Mopani copper mines, which operate under Vedanta Resources Ltd. and Abu Dhabi’s International Resources Holding, respectively, to facilitate increased production.
To meet its goal of producing 3 million tonnes of copper annually by 2031, the Zambian government anticipates that existing mining projects will need to double their output to approximately 1.4 million tonnes. Furthermore, exploration sites, such as the Bill Gates-backed KoBold Metals’ Mingomba project, are projected to contribute an additional 1.2 million tonnes annually.
The strategy also mandates that investors within the critical minerals sector allocate at least 35% of their procurement costs to local suppliers. Additionally, the government plans to review and modify Zambia’s policy and regulatory frameworks to limit the export of unprocessed materials, ensuring that the benefits of mining activities are maximised for the country’s economy.
This initiative reflects Zambia’s commitment to harnessing its mineral wealth to drive economic growth and enhance local participation in the mining sector.
