Zambia: The Return of Anglo-American & Revival of the Mining Sector

The news that Anglo American has returned to mining activity in Zambia has drawn the attention of global operators and investors. The move came in the form of a joint venture with the junior exploration company Arc Minerals for participation in copper operations in the North-Western Province. The venture may be considered relatively tentative at this stage but it has helped bolster the perception that the mining environment has improved substantially under the Hichilema government.

To what extent has mining in Zambia indeed improved and become more attractive to private mining interests?

There has certainly been much activity and changes driven by the New Mineral Resources Policy 2022-2027. A new independent mining commission is being established to close regulatory gaps, mining royalty taxes are now deemed deductible, greater transparency in licensing and reduction of speculative license-holding is being achieved, the Public-Private Partnership framework is being re-examined and the Mining Act is under review (although the time line on this is uncertain.)

The global copper price is historically volatile but the demand is likely to increase markedly as a green commodity required inter alia for power generation. The Zambian government is keen to capitalise on this and has expressed its intent to increase production from the current 850 00 metric tons per annum to three million by 2032.

Many may not be aware that much of this major mining country has not been explored or has been insufficiently explored! I visited the then so-called ‘New Copperbelt’ in the North-Western Province on a number of occasions as it opened up from around 2002 and had to ask myself why it had taken so long to uncover this new national treasure? Today this area is a hive of activity with First Quantum as the major player.

Now the government wants to diversify its mining sector and reduce dependence upon copper and cobalt. Alternatives such as gold and manganese are referred to and the recent lithium discoveries have created some excitement.

Great opportunities for more geological mapping and development of new mining resources!

 Like almost everywhere in the continent, the government wants to maximise localisation. It is attempting to formalise local cooperatives and is encouraging partnerships between local Zambian companies and foreign operators. Despite lack of local access to capital, the intention is to ensure participation by Zambian suppliers in the mining supply chain.

Partnerships with appropriate local appropriately identified companies could ease access for foreign companies to Zambian mining opportunities!

 Much still has to be done to render Zambian mining highly attractive, but the recent developments certainly make it worthy of a good look!