Zambia to Launch New Mineral Investment and Trading Unit to Boost Resource Revenue

In a strategic move to maximize the country’s earnings from its natural resources, the Zambian Cabinet announced the establishment of a new entity dedicated to mineral investment and trading.

mineral investment and trading

Lusaka, Zambia — In a strategic move to maximize the country’s earnings from its natural resources, the Zambian Cabinet announced the establishment of a new entity dedicated to mineral investment and trading. This decision aims to shift the country’s revenue model from dividend payments to a production-based sharing mechanism.

As Africa’s second-largest copper producer, Zambia currently owns several mining assets through ZCCM Investment Holdings. The new special purpose vehicle (SPV) will enhance Zambia’s control over its mineral wealth. The Cabinet stated that the SPV will facilitate the sharing of minerals produced, enabling the government to negotiate prices and ensure accurate declarations of mineral consignments for export and domestic use.

“The creation of this entity marks a significant shift in how Zambia will benefit from its mineral resources,” the Cabinet announced. “Moving away from a dividend payment model to a production-based sharing mechanism ensures that the benefits accrue directly to the people of Zambia, beyond statutory obligations.”

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Mineral Investment And Trading: New Model for Greater Benefits

The new business model aims to provide a more equitable distribution of profits from mineral production, ensuring that Zambia reaps more substantial rewards from its rich natural resources. This approach is expected to provide greater transparency and accuracy in the declaration of mineral exports, a challenge in the past.

Current Interests and Future Plans

ZCCM Investment Holdings holds interests ranging from 10% to 20% in major mining operations, including those owned by Barrick Gold, Vedanta Resources, and First Quantum Minerals. Recently, ZCCM sold a 51% stake in Mopani Copper Mines to a unit of the United Arab Emirates International Holding Company while retaining the remaining interest.

In an interview with Reuters in February, Mines Minister Paul Kabuswe indicated Zambia’s intention to negotiate larger stakes in new mining projects. This is part of a broader strategy to increase national revenue and encourage greater investment in social projects by mining companies.

Ambitious Production Goals

Zambia produced 698,000 metric tons of copper in 2023, a decline from 763,000 metric tons in 2022. However, the country has set an ambitious target to triple its annual copper output to three million metric tons within the next decade. This increase is driven by the rising global demand for copper, essential for the electricity and construction industries.

Establishing the new mineral investment and trading unit represents a significant step forward for Zambia. By adopting a production-based sharing mechanism, the country aims to secure more substantial and direct benefits from its natural resources, ensuring its citizens’ long-term economic growth and prosperity.

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