Zambia has witnessed significant developments in the nation’s mining sector, driven by a confluence of factors: rising global demand for critical minerals, significant new discoveries, and government initiatives aimed at fostering growth, writes Dr Nicolaas C Steenkamp.
Several key trends have characterised the Zambian mining landscape in the year to date. Global mining and technology headlines were grabbed by the announcement of a potentially groundbreaking new worldclass copper deposit being discovered using a combination of historical data, reinterpreted by AI. In February 2024, KoBold Metals, a Bill Gates-backed exploration startup, announced the discovery of a massive copper deposit at the Mingomba project. This discovery, estimated to hold between 500 000 and 600 000 metric tons of copper, has the potential to become one of the world’s largest copper mines.
There has also been a drive by the Zambian government in reforms and a focus on critical minerals. The Zambian government has taken proactive steps to revitalise the mining sector. The 2023 cabinet decision to classify copper, cobalt, lithium and other minerals as “strategic” highlights government’s commitment to maximising exploitation of these resources. Additionally, the 2024 budget speech outlined plans for a nationwide geophysical survey and the exploration of newly discovered lithium deposits.
The Mines and Minerals (Amendment) Act No. 29 of 2022 (December 2022) came into effect on 1 January, 2023. It enforces the obligation to pay mineral royalty taxes on various entities including holders of mineral trading permits, artisanal mining rights, small- and large-scale mining licenses, and small- and largescale gemstone mining licenses.
In addition, the Property Transfer Tax Act No. 27 of 2022 (January 2023) introduced a tiered property transfer tax system also effective 1 January, 2023. The tax rate varies depending on the type of mining right being transferred:
- 10% of the realised value for a mining right associated with a mining license;
- 5% of the realised value for a mining right associated with an exploration license;
- 10% of the realised value for a mineral processing license
The 2024 budget, while not introducing legislative changes, proposed funding for aerial geophysical surveys across several Zambian provinces. This initiative aims to incentivise exploration and expedite the discovery of new mineral deposits. New and expanding operations Despite a depressed regional exploration and mining environment in Zambia since early 2023, there has been a notable increase in exploration activity in the country. Zambia is in fact experiencing a surge in exploration activity driven by both established and new players. Anglo American announced an exploration campaign for copper and cobalt in the North-Western province in February 2024. The, Zambian Copper Project (ZPC) comprising a number of licenses covering circa 870km2, undertaken through a joint venture with Arc Minerals, reflects the growing investor interest in Zambia’s mineral potential.
Furthermore, there are several ongoing and upcoming mining operations which exemplify the dynamism of the Zambian mining sector. This includes the NFCA Mine Expansion, operated by First Quantum Minerals (FQM), which is undertaking a USD500 million expansion project at the NFCA Mine in Chambishi. This project will increase annual copper production by 30 000 metric tonnes and also aims to revive cobalt production at the mine. The expansion includes the Chambishi Copper Smelter, which will be revamped to handle the increased ore processing capacity.
FQM’s Kansanshi mine S3 project, expected to come online in 2025, represents another significant development. This project is set to unlock a new copper resource, further bolstering Zambia’s copper production capacity. It was indicated at the end of 2023 that the project was back on track.
The Kamisengo Project undertaken by Barrick Lumwana, has committed a significant investment of USD2-billion into developing the Kamisengo project, a greenfield copper mine located in the Northwestern Province. This project is expected to be a major contributor to Zambia’s copper output in the coming years.
Technical considerations and challenges
Despite the positive outlook, the Zambian mining sector faces several technical challenges that require attention. The push for Dr Nicolaas C Steenkamp is an independent consultant, specialising in geological, geotechnical and geometallurgical projects and mining project management. He has over two decades of industry experience with global exposure. (ncs.contract@gmail.com) Dr Nicolaas C Steenkamp a number of global environmental and social targets by 2023, is impacting the Zambian mining and exploration sector.
Ensuring responsible mining practices that minimise environmental degradation is crucial and environmental sustainability has been highlighted to companies operating in the country, as the industry expands. Government and NGOs continue to push for implementing sustainable mining techniques, effective waste management and robust environmental monitoring programs.
Community development programmes continue to be endorsed, to ensure that the benefits of mining extend beyond revenue generation. Local communities near mining operations are further encouraged to be active participants in the development process. Implementing effective social development programmes that address needs in areas such as education, healthcare and infrastructure development remain the standard community uplift initiatives.
The growth of the mining sector necessitates an upgrade of Zambia’s transportation and energy infrastructure and this development continues to be largely driven by foreign owned companies. Efficient and reliable transportation networks are vital for moving minerals to market and Chinese investment in this sector remains large. Additionally, ensuring a stable and affordable energy supply for mining operations is crucial as the drive for more domestic ore beneficiation and the construction of processing plants is planned to be ramped up.
The road ahead
This year marks a pivotal year for Zambia’s mining sector. Significant discoveries, coupled with government reforms and ongoing exploration activity, paint a picture of a burgeoning industry. However, addressing technical challenges related to environmental sustainability, community development and infrastructure development will be essential for ensuring the sector’s long-term success.
