Following a prolonged period of underperformance and strained investor relations, Zambia’s mining sector is in a phase of cautious recovery and consolidation, says specialist global risk consultancy Control Risks senior analyst Otlotleng Mokgatle.

However, he notes that the country will need to re-evaluate its goals and pursue stronger implementation to achieve its full potential.

Copper remains the backbone of the country’s mining industry, accounting for the bulk of export revenues and foreign exchange earnings in 2025. Output increased by about 8% in 2025, to about 890 000 t, reflecting a gradual stabilisation of major assets and renewed capital inflows, adds Mokgatle.

Despite this increase, Zambia continues to struggle to meet its production targets, with a growing consensus among policymakers and investors on realistically achievable production levels in the near to medium term.

“. . . government’s ambition to reach three million tonnes of copper a year by 2031 is widely viewed as aspirational rather than achievable, frankly. However, it remains an important target to aim for, as it builds ambition and discipline,” asserts Mokgatle.

Instead, brownfield expansions, alongside greenfield projects, supported by improved datasets from national geological surveys, are a more credible opportunity.

Mokgatle further notes that, in growing its mining sector, Zambia’s policy and regulatory environment for mining has noticeably stabilised under President Hakainde Hichilema, particularly in comparison with the volatility that characterised the late 2010s.

Since taking office in August 2021, the Hichilema administration has prioritised restoring investor confidence by improving policy predictability, resolving legacy disputes with mining companies and avoiding abrupt changes to the fiscal and licensing framework.

“This has resulted in a more transparent and consultative operating environment.”

With Zambia’s upcoming general election in August 2026, policy continuity remains the most likely outcome, which would reinforce the current pro investment trajectory in the mining sector rather than introduce major policy shifts, he adds.

In the event of re-election of the current administration, the key risk for mining investors is whether government can maintain macroeconomic discipline and translate its broadly investor friendly posture into effective, consistent implementation, during and after the election cycle.

Aligned with this is the establishment of mining regulatory body Minerals Regulation Commission (MRC), which came into effect in 2025. The MRC aims to modernise mining governance by centralising regulatory functions that were previously fragmented across multiple departments.

While the reform is significant on paper and aligns Zambia with international best practice by separating policy formation from day-to-day regulation, Mokgatle adds that “early evidence suggests that the impact on regulatory efficiency has so far been limited”.

While the required institutional architecture is in place, the MRC remains in an establishment phase, with industry feedback indicating that long standing bottlenecks have not yet materially improved. These bottlenecks include licensing, cadastre management and inter agency coordination.

Mokgatle points out that this is not unusual from a political risk perspective: “In Zambia, as in many frontier and emerging markets, institutional reform tends to move faster on legislation than on operational capability.”

As a result, while the MRC is directionally positive and signals reform intent, he says investors should treat near term regulatory gains with caution, arguing that the real test will be whether the MRC can translate its mandate into tangible practical benefits, such as shorter timelines, clearer decision-making and reduced administrative friction, over the next 12 to 18 months.

Bottlenecks
Power constraints, logistics bottlenecks and the pace of institutional reform negatively affect project economics and timelines, alongside the lingering sensitivity of Zambia’s heavy dependence on copper revenues, which leaves the macro-economic environment exposed to price shocks.

“Zambia’s main problems come not from unfriendly policies, but from weak infrastructure and challenges in putting plans into action,” adds Mokgatle, noting that this creates investor hesitancy.

Of these impediments, energy reliability remains the most persistent operational constraint impacting on mining companies, with the risk profile becoming more complex over the past year, he says.

Historically, electricity supply has been the primary concern, given the country’s heavy dependence on hydropower and its exposure to drought cycles; however, mines have addressed this through power imports and private power arrangements.

More recently, fuel supply has emerged as an acute operational risk, compounded by the war in Iran, with risks now impacting on the wider energy and transport systems.

Mokgatle says Zambia is entirely import dependent regarding refined fuel, sourcing the bulk of its supplies through Tanzania and, to a lesser extent, Mozambique.

“This vulnerability is structural. Liberalisation of the fuel sector over the past decade has led to a rapid increase in the number of oil-marketing companies, from fewer than 10 to more than 80, but without a corresponding build up in storage infrastructure,” he points out.

As a result, most marketers operate on thin buffers, while strategic reserves remain concentrated under government control.

In periods of stress, diesel allocation is prioritised to the mining sector, further highlighting the system’s vulnerability to sudden external shocks.

Therefore, while Zambia’s mining sector offers broad industrial opportunities, operational reform implementation will, ultimately, determine long-term outcomes across the sector, concludes Mokgatle.