Zambia set to negotiate bigger stakes in new mining projects

Zambia mines minister Paul Kabuswe

Zambia mines minister Paul Kabuswe

Photo by Reuters

7th February 2024

By: Reuters


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Zambia is keen to negotiate larger holdings in new mining projects in order to raise its revenue and boost spending by investors on social projects, mines minister Paul Kabuswe said.

The push by Lusaka through state-owned ZCCM-IH would apply to future agreements, but does not include existing mines and should not unnerve investors, Kabuswe told Reuters.

Zambia is Africa's second-largest copper producer after neighbouring Democratic Republic of Congo and ZCCM has interests of 10% to 20% in mines including those owned by Barrick Gold, Vedanta Resources and First Quantum Minerals.

ZCCM sold a 51% stake in Mopani Copper Mines to a unit of United Arab Emirates' International Holding Company, retaining the remainder, which previously belonged to Glencore.

"Stakes in new tenements will actually be moulded around such kind of partnerships," Kabuswe said in an interview on Tuesday on the sidelines of the Africa Mining Indaba.

"We want to make sure that there is win-win, that there is no slave-master relationship and we also want to make sure that there's social impact," he added.

While Zambia's government has set a copper production target of about three-million metric tons within a decade, output has been declining gradually due to challenges at some operations including Mopani and Konkola Copper Mines.

"We are going to be very strong in negotiations," Kabuswe said. "But not too strong to the extent of scaring away potential investors."

Lusaka also plans to start buying minerals such as copper from projects it has stakes in to trade on its own, he said.

While the details of establishing a trading house are still to be worked out, a special purpose vehicle had been approved by the Zambian cabinet, Kabuswe said.

The Zambian government is also closely following developments on First Quantum's Panama mine and hopes the challenges the Canadian miner is facing are resolved.

First Quantum has not informed the government of any plans to sell or bring in a strategic investor, he added.

"We are looking closely," Kabuswe said. "But looking closely not in a negative sense, but hoping that things around them can be resolved so that it doesn't affect ourselves."

Edited by Reuters




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