JOHANNESBURG (miningweekly.com) – In line with its objective of expanding small-and large-scale mining operations and attracting further investment in the sector, Zambia has initiated a process to review its mining policy, Ministry of Mines, Energy and Water Development director of mines Mooya Lumamba said on Thursday.

This would entail reviewing the viability of the existing industry policy and legislative framework, and promoting investment in the exploitation of minerals other than those commonly mined in the region, namely copper, manganese, iron and gemstones.

Additional proposals included the establishment of microcredit financing mechanisms and the provision of marketing assistance for small-scale mining operations in Africa’s top copper-producing country.

Speaking at the Africa Mining Summit 2013, in Johannesburg, Lumamba said that, following the privatisation of the country’s mining industry in 1998, the State had attempted to achieve a “strategic repositioning” of the legal framework.

“Through this, we hope to arrive at a balance that will create a competitive, thriving and sustainable mining industry that benefits Zambians, while concurrently regarding the investor,” he commented.

The proposed policy amendments would align with the country’s Mines and Minerals Development Act of 2008, which was established to entrench a private-sector-driven mining sector.

While the Act had a provision for the distribution of mineral royalty in the community in which mining occurred, Lumamba assured delegates that the State had no plans to legislate preferential procurement policies.

“We have, in our legislation, always tried to avoid dictating the percentage of required mandatory [localisation]. Instead, in the Act we have a proclamation through which we encourage the investor, to the maximum possible extent, to give priority to local procurement and employment,” he said.

MSA Group MD Keith Scott added at the conference that the country’s rejection of outright resource nationalism was an effective strategy in attracting investment.

“It is good to see that Zambia is proactively dealing will the perceived risk of resource nationalisation, and its boom in mining exploration and mining project development in the last five years is a testament to this policy,” he said.

To further promote foreign investment, the Ministry of Mines had introduced and was currently implementing, a new online mining cadastre system for the administration of mining rights, in an effort to streamline the issuance of rights at a “one-stop centre”.

All mining rights applications were processed through a Mining Advisory Committee (Mac), which comprised individuals nominated from key government departments and stakeholder organisations.

“While the central mining cadastre office is responsible for receiving and processing applications for mining rights, Mac is charged with scrutinising and recommending the granting of mineral rights,” said Lumamba, emphasising that, to ensure transparency, all mining rights information was currently available online on a trial basis.

Lumamba added that growing activity in the mining sector, which accounted for over 80% of the country’s exports and contributed 10% of gross domestic product, had increased the country’s energy requirements to such a degree that additional funding was required to double its current electricity capacity.

The company would need to increase its electricity generation capacity to 2 800 MW in five to six years to ensure adequate supply of power to the mines, with State-owned energy utility Zesco planning to invest about $5.3-billion in generation and transmission projects.

Zambia's peak electricity demand of 1 650 MW exceeded the country's generation capacity by about 250 MW and demand was projected to rise by 3% to 4% a year, Lumamba said.

Zambia’s government has retained a minority shareholding of between 10% and 20% equity in most of the large-scale mining companies following privatisation of former majority State-owned mining conglomerate the Zambia Consolidated Copper Mines in 2008.