Zambia to establish new mineral investment entity

Zambia is gearing up to establish a fresh entity dedicated to investment and trading in minerals, aiming to capitalise more effectively on its abundant natural resources.

Following approval from the Cabinet, the government of Zambia, the second-largest copper producer in Africa, is poised to create a Special Purpose Vehicle (SPV) primarily for investment and trading activities.

This move marks a departure from the conventional dividend payment approach for mineral resources, shifting towards a production-based sharing mechanism designed to ensure broader benefits for the people of Zambia beyond statutory obligations.

Under the new business model, there will be provisions for sharing produced minerals, empowering the government to negotiate mineral prices effectively and ensure accurate declarations of mineral consignments destined for both export and domestic utilisation.

ZCCM Investment Holdings, which holds interests in various mines, including those under Vedanta Resources and First Quantum Minerals, has been instrumental in this initiative.

Notably, ZCCM recently divested a 51 per cent stake in Mopani Copper Mines to a unit of the International Holding Company of the United Arab Emirates, while retaining the remaining stake.

In February, Zambia’s Mines Minister, Paul Kabuswe, told Reuters the country’s plans to secure larger stakes in new mining ventures, aiming to bolster revenue and encourage increased investment in social projects.

With copper production reaching 698,000 metric tons in 2023 (a decrease from 763,000 metric tons the previous year), Zambia is eyeing an ambitious target of achieving an annual output of 3 million metric tons within the next decade, driven by rising demand for the metal in industries such as electricity and construction.

Attribution: Reuters.