On 12 September, 2024 in a strategic move to enhance the country’s benefits from its critical mineral resources, Zambia has unveiled plans to establish a state-owned firm that will hold a 30% stake in all new mining projects involving critical minerals such as copper, cobalt, graphite, and lithium.

The announcement was made by Mines Minister Paul Kabuswe, who outlined the government’s strategy to leverage Zambia’s position as Africa’s second-largest copper producer and its significant deposits of other critical minerals crucial for the global energy transition.

The state-owned firm will operate under a “production sharing mechanism,” ensuring that at least 30% of the output from new mining projects involving critical minerals is allocated for local benefits. This initiative aims to maximize the country’s gains from its valuable mineral resources.

Zambia’s copper industry has attracted significant investment from major mining companies such as Barrick Gold Corp., First Quantum Minerals Ltd., and China Nonferrous Mining Corp. Also, the Konkola and Mopani copper mines, managed by Vedanta Resources Ltd. and Abu Dhabi’s International Resources Holding, respectively, are expected to boost production substantially.

To meet the government’s target of producing 3 million tons of copper annually by 2031, Zambia needs to double the output of its current assets to approximately 1.4 million tons. New exploration projects, including the Bill Gates-backed KoBold Metals’ Mingomba project, are anticipated to contribute around 1.2 million tons per year.

The government’s strategy includes requiring investors in the critical minerals sector to allocate at least 35% of procurement costs to local suppliers. Zambia also plans to review its policy and regulatory framework to limit the export of unprocessed materials, promoting value addition within the country. By establishing a state-owned firm with a 30% stake in new critical minerals mines, Zambia aims to ensure a significant portion of the benefits from its valuable mineral resources are directed towards local development and economic growth.

Source: https://www.mining.com/web/zambia-plans-state-firm-to-own-30-of-critical-minerals-mines/