Zambia’s proposed minerals regulation law could deter investment and deliver a “fatal blow” to its goal of raising annual copper output to 3 million metric tons, two mining bodies said on Wednesday.
Zambia, Africa’s second biggest copper producer, is proposing a Minerals Regulation Commission Bill that would allow the government to acquire a shareholding in exploration areas before licenses to search for minerals including copper are granted to investors.
The proposed law, seen by Reuters on Wednesday, seeks to give the nation’s minister of finance the right to maintain a shareholding in a mining license on behalf of the government if minerals are discovered.
But Zambia’s Chamber of Mines (ZCM), the main mining industry body, and the Association of Zambian Mineral Exploration Companies (AZMEC) said in a joint statement some parts of the proposed law “will drive up the perception of investment risk” in the country.
“(With) 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 said.
Zambia’s mines ministry was not immediately available to comment.
President Hakainde Hichilema’s government is seeking to attract more investors to boost copper output to about 3 million tons over the decade.
Copper output slumped to 698,000 tons in 2023 from 763,000 tons the previous year, according to data from the ZCM.
Barrick Gold and First Quantum Minerals are among investors that have outlined major expansion plans to boost copper output in Zambia.
(Reporting by Chris Mfula; Writing by Nelson Banya; Editing by Angus MacSwan and Jan Harvey)
