The shift to mining privatisation in the Zambian mining sector has been necessitated by the need to improve the peformance of the mining industry to better its contribution to Zambia’s economic development.

In his speech for the Africa Downunder Conference, in Perth, Australia, last month, Zambia’s Minister of Mines, Energy and Water Development Christopher Yaluma noted that, owing to its importance to the economy, the control of the mining industry in Zambia has moved from private to State and back to private again.

“History has shown us that the performance of the mining industry in Zambia has tended to be good during the time of private control, as opposed to the time of State control. For this reason, government is committed to maintaining an environment conducive to private sector participation in the exploration for, and exploitation of, minerals in Zambia,” he said.

Since the 1990s, the Zambian government has pursued a mining policy aimed at ensuring an environment conducive to private investment. Through the policy, government aims to ensure the development of a profitable and sustainable mining industry, driven by public-private partnerships.

Yaluma highlighted that the role of government remained that of creating an enabling environment for the development of a sustainable and orderly mining industry, contributing to the economic development of the country.

“One of the ingredients of a favourable investment environment for the extractive industry, presently, is transparency and fairness in the distribution of benefits from the mineral resources.

“An environment where both the investor and the owners of the mineral resources are assured of a fair return from the exploitation of the resources. To this effect, government is working on the legal and regulatory framework to ensure that it adequately provides for investors in line with international best practice, while at the same time, responding to the needs of the people in Zambia,” he explained.

The Zambian government is currently analysing the mining value chain, which includes exploration, mine production, processing, refining, export and sales, so that it can devise efficient and effective minerals monitoring and auditing mechanisms.

Yaluma pointed out that the minerals monitoring and auditing mechanism would not only ensure that what is owed to the government – in terms of revenue – is assured, but would also eliminate the perceptions of widespread tax aviodance practices within the mining sector.

Further Improvements to Regulatory Framework
In addition to improving the regulatory framework of the mining sector, the Zambian government is also focusing on reducing the cost of doing business for the extractive industry by improving the provision of geological information and the mining rights licensing system, ensuring the availability of skilled labour and providing reliable support infrastructure.

The government, through the geological survey department is undertaking intensive geological mapping, particularly in the unmapped areas, which constitute about 40% of the country. Yaluma mentions that to speed up the mapping process, the survey was also being undertaken in conjuction with counterpart institutions. Also, available geological data was being digitalised for easy dissemination to the general public.

“In 2006, Zambia introduced a mining cadastre system for the management of mining titles. The implementation of this system has not been without challenges and continues to be a work in progress - until such time that it is perfect,” he noted.

Through these efforts, the efficiency in the handling of applications for mining rights, transparency and elimination of overlaps will be achieved. Also, the process of developing an online mining rights application and evaluation system is under way.

This includes enabling mining right applications to be submitted online, enabling online payments for statutory payments, enabling online submission of statutory reports, configuring the mining cadastre system to send emails and SMS notifcations to mining right holders and applicants, and the commissioning of an online portal to make mining cadastre information accessible to the public.

In view of the skilled labour shortages that Zambia is experiencing, the government has undertaken measures to review the education curriculum of universities, colleges and trades training institutions to meet the needs of the mining industry. Also, government is looking to encourage mining and exploration companies to develop extensive skills development in conjunction with education institutions.

Also, as inadequate infrastructure is one of the factors affecting the development of the mining industry, Zambia is undertaking a number of projects in the energy sector to address this challenge through government’s power utility company to increase power generation capacity by 1 500 MW by 2015.

In the transport infrastructure system, government aims to reduce the cost of doing business in the mining industry through the improvement of railway networks and their extension to other parts of the country that previously did not have access to rail transport.

“The Link Zambia 8 000 Road Project launched in 2012 is one of the projects aimed at improving the transport sector in Zambia,” said Yaluma.

He concluded by highlighting that, with the abundance of mineral resources and the conducive environment that the Zambian government is continuously improving on, Zambia is among the best investment destinations in Africa.