THE Zambian government announced on Wednesday that it will establish a new entity dedicated to investment and trading in minerals. This decision aims to enhance revenue from the country’s abundant natural resources. The Cabinet has approved the formation of a Special Purpose Vehicle (SPV) to facilitate this initiative.
Zambia, Africa’s second-largest copper producer, currently holds several mining assets through ZCCM Investment Holdings (ZCCM.LZ). The creation of the SPV marks a strategic shift from the traditional dividend payment model to a production-based sharing mechanism. This new approach is designed to ensure that the benefits of mineral resources extend beyond statutory obligations, providing greater value to the Zambian people.
The Cabinet emphasized that the SPV will enable the government to share in the production of minerals, negotiate favourable mineral prices, and ensure accurate declarations of mineral consignments for both export and domestic use.
ZCCM Investment Holdings has stakes in various mines, including those operated by Vedanta Resources and First Quantum Minerals. Recently, ZCCM sold a 51 percent stake in Mopani Copper Mines to a subsidiary of the United Arab Emirates’ International Holding Company, while retaining the remaining shares.
In a related development, Mines Minister Paul Kabuswe stated in February that Zambia intends to negotiate larger stakes in new mining projects. This move is part of the government’s broader strategy to increase revenue and encourage investor spending on social projects.
Despite a recent dip in copper production, with 698,000 metric tons produced in 2023 compared to 763,000 metric tons in the previous year, Zambia has ambitious plans to boost its annual output to 3 million metric tons within the next decade. This increase is driven by growing demand for copper in the electricity and construction industries.
