Zambia’s proposed Minerals Regulation Commission Bill could deter investment and deliver a “fatal blow” to the country’s plans to increase annual copper output to 3 million tons, according to two prominent mining organizations.
The Zambian government has introduced the new Bill to “regulate and monitor the development and management of mineral resources” in the nation, which is Africa’s second-largest copper producer.
However, the Zambia Chamber of Mines (ZCM) and the Association of Zambian Mineral Exploration Companies (AZMEC) issued a joint statement expressing concerns that certain aspects of the proposed law “will drive up the perception of investment risk in Zambia.”
“Unfortunately, due to the prospect of forced ‘free carry’ acquisitions by the state of stakes in new ventures, this Bill will seriously undermine property rights,” the mining industry bodies stated. They further warned that the Bill “grants unaccountable and arbitrary discretionary decision-making powers to individual regulators, which present obvious future corruption risks.”
The Zambian Ministry of Mines was not immediately available for comment.
Since taking office in 2021, President Hakainde Hichilema’s administration has aimed to restore the country’s investment reputation and boost copper production, which had been affected by the previous government’s 2019 seizure of Konkola Copper Mines from Vedanta. The current government has since returned the company to Vedanta and is working to increase copper output to 3 million tons annually within the next decade, capitalizing on the growing demand for the metal essential to the global shift toward cleaner energy sources.
Copper production in Zambia fell to 698,000 tons in 2023, down from 763,000 tons the previous year, according to data from the Zambia Chamber of Mines.
Despite these challenges, major mining companies like Barrick Gold and First Quantum Minerals are investing billions into their Zambian copper assets. Additionally, the United Arab Emirates’ International Resources Holding (IRH) has pledged to invest $1.1 billion to expand output at Mopani Copper Mines after acquiring a 51% stake in the company previously owned by Glencore.