Stable policies attracting mining investment

First Quantum Minerals (FQM) says stable and consistent policies have sparked a resurgence in direct foreign investment in the country’s mining industry

“We’re now responding to the incentives, stability and consistency of policy. Mines can now seek capital whether it’s self-generated or from the wider international financial institutions,” said Kyansenga Chitoshi, FQM’s Kansanshi Mining Corporate Affairs Manager.

Chitoshi made the comments at a panel of multi-industry representatives discussing key findings of the government’s 2022 Foreign Private Investment & Investor Perspective Survey.

The survey is released by the Balance of Payments Statistical Committee, composed of the Bank of Zambia, the Zambia Statistics Agency, the Zambia Development Agency and other member institutions.

The main objective of the survey is to understand the magnitude, types and direction of foreign private capital liabilities and assets.

“In 2021, global foreign direct investment (FDI) flows recovered strongly to pre-pandemic levels, rising by 64.0 per cent to about US$1.6 trillion. However, Africa accounted for a small proportion, US$83.0 billion or 5.2 per cent, of the total global FDI flows,” said Dr Denny Kalyalya, Bank of Zambia Governor.

A key finding of the survey was that from 2021 to the first half of 2022, Zambia recorded a net outflow of FDI liability mainly attributed to debt repayments in the mining sector.

Inflows, however, were recorded from Canada, Australia, South Africa, Mauritius, the United States of America, the Cayman Islands, Sweden and China. Zambia’s FDI liability stocks continued to be dominated by mining investments from Canada, Switzerland, Australia, China and the United Kingdom.

The net outflows reported in 2021 were due, in part, to the instability that characterised mining policy in the prior regime.

According to Sokwani Chilembo, Zambia Chamber of Mines Chief Executive Officer, the prioritisation of strengthening a company’s balance sheet through debt repayment or distribution of dividends as opposed to reinvestment was a result of investor insecurity brought on by unpredictable policies. This was the unfortunate position that many players in the mining sector found themselves in during the period under study.

“We have competitors in the same space. We have other countries looking for large multinationals and foreign investors to put their money into development projects or mining projects in their jurisdictions. FQM has had a wonderful growth story with various different operations [but] aside from acquiring the asset, there is a significant investment that has to go in order for you to viablely continue to mine,” elaborated Chitoshi.

Having announced a colossal investment of US$1.35bn earlier this year and officially breaking ground at the new Enterprise Nickel Mine, First Quantum Minerals has proven to be among the investors that have found renewed confidence in Zambia’s business climate.

“There is a great amount of optimism and belief in the stability of the country,” she concluded.


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