KEY POINTS
- Zambian miners are pushing back against the government’s plan to increase its stake in the mining sector.
- The state aims to gain more control over resources, but miners warn this could affect investment.
- The conflict raises concerns about the future of foreign investment in Zambia’s mining industry.
Zambian miners are now opposing the government’s plan to acquire more equity in the highly-revenue generating mining industry in the country.
This action that seeks to centralize control of Zambia’s minerals has raised concern among miners as they believe that it will reduce future investment.
The government’s proposal aims at getting a bigger slice of the cake from the country’s lucrative copper and cobalt deposits. Zambia, which is the second largest copper producer in Africa, has been a popular destination for mining companies for years.
However, the government is now seeking to increase its share in these resources in order to gain more from the nation’s wealth.
Miners caution investors on the risks associated with investing in the mining sector.
The mining industry has argued that the expansion of state ownership is likely to decrease the profitability and thus the certainty of investment.
Businesspeople have cautioned that if the government’s proposal is implemented the situation may deter foreign firms from investing or continuing with business in Zambia.
The protest arises at a time when Zambia is seeking to encourage more FDI inflows to foster the growth of its economy.
Mining Weekly has reported that this approach has elicited concerns of over regulation and some people have said this can hinder competition and innovation in the sector.
What’s at stake for zambia?
Mining industry is an essential sector in Zambia’s economy which has greatly contributed to the country’s Gross Domestic Product and employed many people.
This is due to the government’s aim of increasing its share of mining revenues in an effort to finance development projects as well as to bring down the national debt.
However, there is potential for conflict between miners and the state, which may slow down key decisions and development of the industry.
With the issue becoming more and more heated, both the pro and the anti-side are trying to look for a middle ground.
Indeed the industry players are urging government to come up with policies that would guard the interest of Zambian economy without making the sector unattractive to foreign investors.
If the government and the mining companies can work together, this could mean the dawn of a new era in Zambia where both the state and private capital can benefit from the resources.
However, failure to reach an agreement could disrupt the country’s mining sector and jeopardies its future economic development.
