The US government, a company backed by one of the world’s richest men, and a relative newcomer – all are amongst those that are looking to help Zambia maintain its rating as a leading copper producer.
As of 2022, the African nation is currently the world’s ninth largest copper producer, and Africa’s number two, with forecasters and government predicting a production acceleration.
A mining powerhouse for well over 100 years, the Zambian economy rebounded in 2021, with GDP growing at 4.6%, from a contraction of 2.8% during the pandemic in 2020.
Its recovery was driven by high copper prices, post-election market confidence, and continued recovery in agriculture. GDP is projected to grow by 3.8% over 2022–24, buoyed by an improved macroeconomic environment; a positive copper price outlook and stable and predictable mining policy environment; and improved electricity supply, according to the World Bank.
The Zambian government’s support for the mining sector has been highlighted recently by the US government, global investors, and local mining industry executives.
The Zambia Chamber of Mines recently reacted positively to the 2023 National Budget announcement, calling it an encouraging move towards the re-establishment of Zambia as a key mining investment destination.
“The budget announcement shows that the government clearly understands what investors need to commit to Zambia. Taken together, the budget measures are likely to be viewed as an encouraging move, although we will know more once the details have been fully analysed and the attendant legislation is finally passed,” said Sokwani Chilembo, CEO of the Chamber of Mines.
The Chamber said the government’s amendments to the mineral royalty tax to be calculated on an incremental or sliding scale basis will start to bring Zambia’s tax regime back in line with other mining countries.
‘A big deal’
Zambia’s copper riches were headlined globally recently when the Bill Gates-backed KoBold Metals announced a US$150 million investment in the large Mingomba Copper Deposit during the Biden Administration’s 2022 African Leader’s Summit.
Confirming the company’s investment, KoBold’s president, Josh Goldman, said the company had identified Zambia as an ideal location for its support and the use of its game-changing artificial intelligence technology.
“We use artificial intelligence to find ore deposits that everyone had missed until now. But that’s not enough. For our business to succeed, we have to invest in the countries that offer the best opportunities. And when we look around the world, for the best places to invest, Zambia rises to the top,” Mr Goldman said.
“Zambia is a safe and peaceful place where we can hire exceptional people, where the laws support investing for the long term, where we can operate in ways that protect the environment and support local communities. And where the government supports our investment with actions that are fair, and transparent, and fast.
“That’s why I’m here to announce the largest investment yet in our company’s history, and investment to own and explore and develop a deposit in the Zambian Copper Belt. We are excited to join with two important business partners, the global mining investment firm EMR Capital and Zambia’s public-private mining companies SEC MIH,” he added.
Owen Haggerty, executive chairman of EMR Capital, said the investment company had chosen to take a long-term position in Zambia because of its stability, investment-friendly jurisdiction, and attractive infrastructure.
“We see this transaction as a significant step forward to unlocking considerable value for all stakeholders. Importantly, the transaction is fully aligned with Zambian National Minerals Resources Development Policy to maximize exploration throughout Zambia.”
US commerce secretary, Gina Raimondo, said that when people look at countries like Zambia, they see a good climate to do business and a government that is making it easier to do business.
“This is a commitment for US$150M into Zambia’s mining sector. And I think this is a model for what we need to do more of. It’s a big deal,” she said.
Zambian minister for mines and minerals development, Paul C. Kabuswe, said the mining sector is critical for the country.
“I hope that this could be the beginning of the many billions of dollars that you would invest in Zambia, especially in the Copper Belt, so that there will be creation of jobs, there will be creation of more resources to the Treasury.
“An investment of such magnitude means that there’ll be creation of jobs, there’ll be creation of direct jobs, there’ll be also creation of indirect jobs, meaning there will be more suppliers.
“We are on a vision of doing 3M tonnes of copper in the next 10 years. Zambia is around 850,000 metric tonnes today. But with the vision and the drive of the current president now, we want to reach 3M tonnes in the next 10 years.”
Hakainde Hichilema, president of the Republic of Zambia, said his message to the world is that his country is ready to do business.
“When you invest in Zambia, you invest in the environment that is conducive, as we’ve heard already, from the speakers before me, an environment that will assure you returns. And we’re talking about also working on our policy, environment, business operating environment, so that we have not just attractive policies, but also consistent [policies].
“I think many of you are aware of shifts and policies that can affect your returns on your investment. We’re determined to make the business operating environment system, therefore, predictive, so it’s easier to make investments … There has never been a better time to invest in Zambia.”
Central Copper Resources
One company getting in on the action is Central Copper Resources. The company describes Zambia as a “world class mining jurisdiction governed by a strong mining code”.
“Copper has historically been Zambia’s largest export and continues to be to this day. The country is home to the ‘Copper Belt’ deposits which are mined by some of the world’s most prolific mining institutions,” the company states.
The company’s wholly owned Zambian subsidiary, the Lunga Basin Project, holds an exploration permit covering an area of 292km2, located in the Lunga basin, which is highly prospective for copper and lies in close proximity to the Chifumpa mine that has a historical mineral estimate (non-JORC Code (2012) compliant) with a grade of over 4% copper.
The company acquired the project In 2020 through the acquisition of Armada Minerals Limited. The planned work programme includes airborne and ground geophysics, infill soil sampling, and 3,000m of RC drilling to test priority target areas where geochemical anomalies have been identified.