Zambia’s Mineral-Rich Copperbelt Seeks New Investment

Zambia’s economy is currently fueled by copper production, with the Copperbelt – referring to the mineral-rich Copperbelt Province and northern territories in Zambia – accounting for 90% of GDP. The Copperbelt straddles the border between Zambia and the Democratic Republic of the Congo (DRC) and offers direct and indirect employment to the majority of the population, generating approximately 70% of the country’s revenue. The area stretches 450 km, boasts a width of up to 260 km and contains over a tenth of the world’s copper deposits. As a result, Zambia was ranked as the eighth-largest copper producer globally in 2022, accounting for 4% of global production. The country has stated goals to increase production to 3 million tons by 2032 –  up from 760,000 tons in 2022 – and plans to launch a high-resolution, countrywide geophysical survey to map its total mineral resources.

Navigating Critical Mineral Supply Chains

Last October, the EU Commission signed two Memoranda of Understanding (MoUs) with Zambia and the DRC on critical raw material value chains. The MoUs, which serve as strategic partnerships between the African countries and the European bloc, cover five areas of cooperation, including joint development of projects and the implementation of sustainable critical mineral value chains. The agreements also serve to mobilize funding for the development of requisite infrastructure and build capacity through training and skills development.

The same month saw an MoU signed between Zambia, the DRC, Angola, the US, the African Development Bank and Africa Finance Corporation for the development of the Lobito Transport Corridor. The project will connect the DRC and Zambia’s copper belts to international markets via Angola’s Port of Lobito, positioning southern Africa as a global supplier of critical minerals.

In addition, the DRC and Zambia signed an agreement in March 2023 with Afreximbank and the UN Economic Commission for Africa for the establishment of special economic zones (SEZs) for the production of battery electric vehicles and related services. The development cost for the SEZs between the two countries is estimated at $30 billion. What’s more, Zambia’s government launched the National Minerals Resource Development Policy in November 2022, which serves to improve the governance of the mining sector while addressing challenges in mining rights administration and environmental and social issues.

Establishing Enabling Legislation

To ensure mineral extraction continues to have a positive impact on the Zambian economy, the Ministry of Mines and Development has underscored the need to develop environmentally-sound policies that appeal to international investors. Through the Ministry’s Act No. 11 of 2015, the government currently oversees mining rights and the acquisition of mining rights, as well as safety, health and environmental requirements of mining operations.

In 2023, the government of Zambia indicated to members of the European Parliament that the country’s Ministry of Commerce, Trade and Industry will collaborate with the Foreign Affairs and International Cooperation and Ministry of Finance and National Planning to organize a workshop that informs the EU on the status, objectives and impact of partnership agreements in the country. These workshops are poised to raise awareness to the value of critical minerals toward Zambia’s socioeconomic development.

Leading Large-Scale Developments

The Kansanshi copper mine, located in the North-Western Province of Zambia, is the largest copper mine by production in Africa. Owned and operated through a joint venture between First Quantum Minerals and Zambia Consolidated Copper Mines-Investment Holdings, the Kansanshi mine holds estimated reserves of 845 million tons of ore grading at 0.66% copper. In May 2022, First Quantum Minerals approved the expansion of the project, which will comprise a 25-million-ton-per-year processing plant, pushing the mine’s annual throughput to 53 million tons.

With an estimated reserve base of 811.3 million tons of proven and probable ore grading 0.5% copper, the Sentinel copper mine in Zambia’s Kalumbila District holds one of the largest copper reserves in the world. The mine is owned and operated by Kalumbila Minerals, a subsidiary of First Quantum Minerals, and was developed at an estimated investment cost of $2.3 billion. Consisting of two major copper deposits – the Malundwe and Chimiwungo deposits – the Lumwana copper mine, owned and operated by Barrick Gold, is a conventional open pit mine near Solwezi holding probable reserves of 390 million tons of copper grading 0.59%.

One of Africa’s largest integrated copper producers, Konkola Copper Mines – a subsidiary of Vedanta Resources – owns and operates three open pit and underground mines: the Nchanga, Nampundwe and Konkola copper mines. The Konkola mine is one of Zambia’s flagship copper projects and holds inferred reserves of 265.6 million tons of copper grading 3.36%. The mine is situated roughly 26 km north of Chingola and serves as the northernmost mine in Zambia’s Copperbelt.