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Zambia, a nation long known for its copper riches, is embarking on a bold new strategy to claim a larger slice of the pie. The government recently announced plans to establish a dedicated entity for mineral investment and trading, signaling a significant shift from its current approach.
This move comes amidst a backdrop of declining copper production – dropping from 763,000 metric tons in 2022 to 698,000 metric tons in 2023. However, Zambia remains Africa’s second-largest copper producer, and with global demand for the red metal surging due to its use in electric vehicles and construction, the country is determined to capitalize on this opportunity.
The new entity, envisioned as a Special Purpose Vehicle (SPV), aims to move away from the traditional model of simply receiving dividends from mining operations. Instead, Zambia seeks a “production-based sharing mechanism,” ensuring the nation benefits more directly from the minerals extracted from its soil. This could involve a profit-sharing agreement or even a system where the government receives a portion of the minerals themselves.
“This is about ensuring the wealth of Zambia uplifts the lives of Zambians,” a senior government official anonymously told the Sunday Times. “For too long, the benefits haven’t trickled down as effectively as they should have.”
The SPV will also empower Zambia to negotiate mineral prices on the global market, potentially fetching a higher return for its resources. Additionally, the government aims to ensure accurate reporting of mineral exports and domestic consumption, plugging any potential loopholes that could lead to lost revenue.
This strategy aligns with comments made by Zambia’s mines minister, Paul Kabuswe, earlier this year. He expressed the government’s intention to secure larger stakes in new mining projects. This not only increases Zambia’s direct financial gain but also compels mining companies to invest more in social development projects within the country.
The journey ahead won’t be without challenges. Zambia must navigate complex negotiations with established mining giants like Vedanta Resources and First Quantum Minerals, who currently hold interests in Zambian mines. But with a clear vision and a strategic approach, Zambia is poised to unlock the true potential of its mineral wealth and ensure its citizens share in the bounty.
The success of this new venture will be closely watched by other resource-rich African nations seeking to assert greater control over their natural resources and ensure their exploitation benefits the continent’s development
