Zambia mining industry accounts for 75% of the country’s total exports, as well as nearly 28% of government revenue and contributes 14% of Zambia’s GDP (Gross Domestic Product).
It is alleged that the country is a significant source of high demand minerals especially cobalt and copper, hence providing opportunities to explorers, producers and mining services providers.
Despite the impact of the Covid-19 pandemic, diversified miner First Quantum Minerals attained its highest ever yearly copper production last year and the company’s Sentinel copper mine in Zambia was also a great contributor to the record production.
Yearly production increased by 11% last year as total production of copper was 778,991 tonnes for the full year, and Sentinel produced 251,216 tonnes of copper for the year achieving a 14% increase from 2019 hence achieving a record for yearly production due to an increase in yearly throughput to 57-million tonnes.
However, all that glitters is not gold as there are evident challenges in the Zambian mining sector and that have the need to be resolved in order to avoid further escalation and to improve the sector’s capacity to mine.
Over the past five years ongoing conflicts pertaining to royalty rates, tax payments, value added tax refunds and the government’s discontent over some miners curtailing or halting production for a particular period altogether, have played roles as disincentives to some miners and investors.
A diversified miner Glencore was criticized by the Zambian government last year after deciding to put its subsidiary Mopani Copper Mines (MCM) on care and maintenance, and since 2019 Konkola Copper Mines (KCM) has been under the government’s enforced provisional liquidation as a result led to ongoing engagements with zinc miner Vedanta Zinc International.
Miners also face obstacles such as power shortages, escalating cost and infrastructural challenges, however, it is said that the finance Minister Bwalya Ng’andu of Zambia has attempted to address the issues and put them to ease as he also stated that the government is not actively looking at nationalizing or taking large stakes in any more mines and that once the government finds an acceptable compromise position with international mining companies there will be many business opportunities throughout the entire exploration and mining life cycle for mining companies.