Zambia is taking significant steps to enhance its involvement in the mining sector, particularly in the extraction of critical minerals essential for the global energy transition. The government, under the direction of Mines Minister Paul Kabuswe, plans to establish a state-owned investment firm that will secure at least a 30% stake in the production of these minerals from future mining projects.
This initiative is part of Zambia’s broader strategy to maximize the benefits from its vast reserves of metals, such as copper, cobalt, graphite, and lithium, which are crucial for the energy transition. The new Special Purpose Vehicle (SPV) will incorporate a “production sharing mechanism,” ensuring that the state receives a significant portion of the output from new mining ventures.
Mission
This move aligns with Zambia’s ambitious goal of increasing copper production to three million tonnes annually by 2031. To achieve this, existing mines will need to double their output, while new projects, such as KoBold Metals’ Mingomba, are expected to make substantial contributions.
Additionally, the Zambian government is pushing for local economic growth by requiring investors in the critical minerals sector to spend at least 35% of their procurement budgets on local suppliers. There are also considerations to revise policies that could limit the export of raw materials, thereby encouraging value addition within the country.
