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Zambia’s Quest for Bigger Share in Mining Profits

Zambia is seeking to increase its stake in new mining projects and boost its revenue from its mining sector, which is rich in minerals

by Victor Adetimilehin

Zambia, Africa’s second-largest copper producer, is seeking to increase its stake in new mining projects and boost its revenue from the sector. The country’s mines minister, Paul Kabuswe, said that the state-owned ZCCM-IH would negotiate for larger holdings in future agreements with investors, but not in existing mines.

A win-win partnership

Kabuswe, who spoke to Reuters on the sidelines of the Africa Mining Indaba on Tuesday, said that Zambia wanted to ensure a “win-win” partnership with mining companies and avoid a “slave-master” relationship. He also said that the government expected investors to spend more on social projects, such as schools, hospitals, and roads, in the communities where they operate.

Zambia has a long history of mining, dating back to the colonial era. The country is rich in copper, cobalt, gold, and other minerals, but has struggled to benefit from its natural resources due to mismanagement, corruption, and low prices. In recent years, Zambia has faced a debt crisis, exacerbated by the covid-19 pandemic, and has sought debt relief from its creditors.

The government of President Hakainde Hichilema, who took office in August 2021 after defeating the incumbent Edgar Lungu, has vowed to revive the economy and restore investor confidence. Hichilema, a former businessman, has promised to review mining policies and contracts, and to improve transparency and accountability in the sector.

A promising discovery

One of the new developments that could boost Zambia’s mining prospects is the discovery of a large-scale copper deposit by KoBold Metals, a California-based exploration company backed by billionaires such as Bill Gates and Jeff Bezos. The company said that its Mingomba copper project in northern Zambia could be one of the world’s biggest high-grade large copper mines, comparable to the giant Kamoa-Kakula mine across the border in the Democratic Republic of Congo.

KoBold Metals, which uses artificial intelligence to find new deposits of copper, lithium, cobalt, and nickel, said that it had secured a 70% stake in the project, while ZCCM-IH held the remaining 30%. The company said that it planned to accelerate the development of the project and start drilling in 2024.

Zambia’s mines minister welcomed the discovery and said that the government was looking forward to working with KoBold Metals and other investors to develop the country’s mining potential. He also said that the government was closely following the situation of First Quantum Minerals, a Canadian mining giant that owns the Kansanshi and Sentinel copper mines in Zambia. First Quantum has faced challenges at its Panama copper mine and has reportedly considered selling or bringing in a strategic partner.

Kabuswe said that First Quantum had not informed the government of any plans to sell or reduce its stake in its Zambian operations, and that the government hoped that the company would resolve its issues and continue to invest in Zambia.

Zambia’s mining sector, which accounts for about 70% of the country’s export earnings, has a lot of potential to grow and diversify. The country has set a target to produce about 3 million metric tons of copper per year by 2030, up from about 800,000 metric tons in 2020. It also aims to increase its production of other minerals, such as gold, gemstones, and manganese.

Zambia’s quest for a bigger share in mining profits is not only a matter of economic necessity, but also a matter of national pride and sovereignty. The country wants to assert its ownership and control over its natural resources, and to use them to improve the lives and livelihoods of its people. By doing so, Zambia hopes to achieve a brighter future for itself and for the continent.

Source: Mining.com  

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