Zambia was overtaken by the Democratic Republic of Congo (DRC) – as a copper and cobalt mining hub in Africa – owing to the latter being a cheaper and easier mining option.

However, efforts made by the Zambian government to restore the industry are expected to attract investors and stimulate the mining industry, says WSP Africa earth and environment MD Ralph Heath.

Prior to 2021, mining regulations and the regime in Zambia did not facilitate mining. However, when Zambia President Hakainde Hichilema came into office, he introduced regulations and initiatives to develop the industry.

The Zambian government has also set a target to increase copper production from 800 000 t/y to three-million tons a year in the next three years, explains Heath.

Zambia has introduced numerous incentives to attract investors, such as reducing a sliding royalty rate for mines, and although the royalty rate has decreased, the copper price has increased, which is beneficial to investors and Zambia, says Heath.

The country has started to attract capital investments from mining companies such as copper miner First Quantum Minerals and diversified miner Anglo American.

Exploration has also increased, while environmental licences and permitting processes have become easier, consequently encouraging mining companies to invest in Zambia.

“This is largely because of the confidence Hichilema inspired by saying that he wants to get mining as the number-one revenue earner for Zambia. It's a really good initiative taking place in Zambia,” says Heath.

While copper and cobalt are the main resources being mined in Zambia, there is also potential for other resources such as lithium, uranium and gold.

He notes that Zambia must ensure that exploration efforts “go into fruition”, emphasising that the efforts made now will require many years to fully transform the mining industry and, therefore, require long-term commitment.

However, while the increasing production to meet the country’s goal of three-million tons a year will result in benefits for the country and investors, Zambia will also need to enhance beneficiation in country, says Heath.

Currently, there is some beneficiation in country, with ore from the DRC beneficiated in Zambia and subsequently transported to South African ports for export.

However, Zambia wants to significantly improve its beneficiation facilities.

He adds that an improved beneficiation process can result in decreasing volumes of export product for beneficiation and ensure more value-added products for the country.

Offtrack

Despite improvements, Zambia is contending with the challenge of efficiently exporting products, relying largely on road transportation to South African ports.

Heath suggests that a railway line could take the bulk of the product to East African ports, rather than those of South Africa, thereby overcoming this challenge.

However, doing so will require investment, and investment in a more efficient, reliable transport system would be significantly beneficial when considering the state of railways in South Africa and the inefficacy of transporting product to the country’s ports, he explains.

He emphasises that, to create greater export efficiency, investment is required from public–private partnerships (PPPs) and co-investment with governments.

Zambia is considering various measures to incentivise investments, such as investment protection, promotion agreements and special economic zones (SEZs), which are “encouraging”.

Investment protection and promotion agreements would guarantee that investor resources will not be nationalised if there is a change in regimes, for example.

SEZs and exports will benefit from a tax holiday for ten years, further incentivising investors.

Additionally, having clear legislation and regulations, as well as quicker and easier means of exploration and licensing, are essential in attracting investments and PPPs, adds Heath.

Other African countries can learn from Zambia's turnaround strategy – in terms of its financial incentives, as well as enabling legislation and regulations – to boost their own mining industries.

Heath looks forward to seeing the full impact of Zambia’s efforts; if it produces the anticipated results, Zambia and the DRC could become the biggest copper and cobalt producers in the world, which would benefit the regional economy.