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Lusaka, Zambia – In a bold move aimed at maximizing the economic benefits of its vast mineral wealth, the Zambian government has announced plans to establish a state-owned investment company that will control at least 30% of critical minerals production from future mines.
Mines Minister Paul Kabuswe unveiled the strategy on Thursday, stating that it would allow Zambia to capitalize on the growing demand for metals essential to the global energy transition. With the country aiming to more than quadruple its copper output by 2031, the government is keen to ensure that Zambians share in the economic rewards.
Under the new framework, a special purpose vehicle (SPV) will be set up to invest in critical minerals projects, including copper, cobalt, graphite, and lithium. A “production sharing mechanism” will be implemented, requiring mining companies to set aside a minimum of 30% of their output from new projects for the SPV.
“This is a significant step towards ensuring that Zambia benefits equitably from its rich mineral resources,” Kabuswe said. “By taking a stake in these projects, we can secure a steady stream of revenue for our country and invest in vital infrastructure and social programs.”
The government’s strategy comes as several major mining companies are investing heavily in Zambian copper projects. Barrick Gold Corp, First Quantum Minerals, and China Nonferrous Mining Corp are all expanding their operations, while the Konkola and Mopani copper mines, controlled by Vedanta Resources Ltd. and Abu Dhabi’s International Resources Holding respectively, are also expected to ramp up production.
To achieve its ambitious goal of producing 3 million tons of copper annually by 2031, Zambia will need to double the output of its existing mines and simultaneously develop new projects. The government’s exploration efforts, including the Bill Gates-backed KoBold Metals’ Mingomba project, are expected to contribute significantly to this target.
In addition to the production-sharing mechanism, the government intends to introduce some other measures to ensure that Zambia benefits from its mineral wealth. These include requiring investors to allocate at least 35% of their procurement costs to local suppliers and reviewing the country’s policy and regulatory environment to restrict the export of unprocessed materials.
“We believe that these measures will help to create a more sustainable and equitable mining sector in Zambia,” Kabuswe said. “By promoting local content and value addition, we can ensure that the benefits of our mineral resources are shared more widely among our people.”
