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Zambia is reintroducing coal into its energy mix as it moves to address a widening electricity deficit that threatens to constrain its mining-led growth ambitions. ZCCM Investments Holdings (ZCCM-IH), backed by the state, has partnered with China’s Wonderful Group Services to develop a 600 MW coal-fired power station, in a project valued at approximately $452 million.
The development will be executed in two phases, with an initial 300 MW coming online before capacity is doubled in a second phase scheduled within five years. This project will be housed under a special purpose vehicle, Ever Great Energy Company, with ZCCM-IH taking a 30% equity stake through a $54.2 million investment, signalling both strategic intent and a willingness to co-invest alongside international capital.
At its core, the move reflects a pragmatic response to Zambia’s structural energy constraints. The country is currently facing a peak power deficit of approximately 1,400 MW, driven in part by reduced hydropower generation as prolonged dry conditions impact water levels at key assets such as the Kariba Dam. With hydropower accounting for the majority of Zambia’s electricity supply, climate variability has exposed the vulnerability of a single-source energy model.
For policymakers, the implications show that energy security has become a prerequisite for economic stability and growth. This is particularly critical for Zambia’s mining sector, which underpins the country’s economic outlook. As Africa’s second-largest copper producer, Zambia is targeting annual output of three million tonnes by 203, a goal that will require reliable, scalable and cost-competitive power supply to sustain operations and attract investment.
In this context, coal is being repositioned not as a long-term transition solution but as a stabiliser, capable of delivering baseload power at scale while alternative energy capacity is developed. The project also reflects broader shifts in how African resource economies are balancing energy transition commitments with immediate industrial needs. While global capital continues to favour low-carbon investments, countries like Zambia are navigating a more complex reality where the pace of transition must be aligned with infrastructure readiness, economic priorities and resource endowments.
The development raises important considerations for investors. While the introduction of new coal capacity may sit uneasily alongside ESG expectations, it underscores the centrality of power availability to mining expansion and the broader critical minerals supply chain. Zambia’s approach signals a recalibration rather than a reversal. As the country diversifies its energy mix, coal is stepping back into the frame as a bridge to a more resilient and balanced power system capable of supporting its long-term copper ambitions.
