For mining firms in Zambia, priorities for next week’s elections include stronger incentives for processing minerals, reviving exploration and expanding power generation, measures they say are needed to deliver the country’s goal of tripling copper output.
Africa’s second-largest copper producer is targeting annual output of 3 million metric tons, nearly triple current levels, as it seeks to capitalize on growing demand for the metal used in EV, power networks and construction.
That demand has spurred a more than 40% jump in benchmark copper future prices in the past year to $14,000 a ton.
“The ambition to triple copper production will require stronger incentives for exploration, local manufacturing and value addition, alongside major infrastructure investments,” said Ayo Sopitan, chief executive of mid-tier miner Metalex Commodities.
Sopitan said Zambia also needed stronger rule of law and dispute-resolution mechanisms, while export duties on concentrates continued to weigh on producers without refining capacity.
Anthony Malenga, president of Zambia’s Chamber of Mines said high investor confidence through tax reforms and closer engagement with miners has helped attract more than $10 billion in investment since the 2021 election.
He said policy discussions between government and miners are helping address most outstanding issues on competitiveness, but Zambia’s growth ambitions now depend on maintaining a robust exploration pipeline.
“The mining industry needs real growth and this can only happen with increased spending on greenfield exploration,” Malenga said, adding that licensing reforms should ensure exploration permits are held by companies with the capacity to develop projects.
Over 8 million Zambians to vote
Mining is the backbone of Zambia’s economy, contributing about 9% of GDP, generating 72% of export earnings and accounting for nearly half of government revenue.
More than 8 million Zambians are registered to vote on August 13 to elect a president, lawmakers and local government representatives.
Analysts expect President Hakainde Hichilema to secure re-election in a peaceful poll, pointing to broad policy continuity for investors.
A senior industry source said Zambia had introduced several significant reforms over the last four years, including currency regulations, local-content rules and fuel-cost measures.
While investors expect limited changes to the fiscal regime after the election, Menzi Ndhlovu, lead analyst at Signal Risk, said power shortages and labour pressures pose the biggest threats to Zambia’s copper growth ambitions.
Power generating capacity may be inadequate to support major mining expansion without significant new investment while labour unions could seek wage increases amid rising mining activity, Ndhlovu said.
Zambia’s mines ministry did not respond to a Reuters request for immediate comment.
Industry executives estimate Zambia needs at least 2,000 megawatts of additional capacity to support its production targets, though recent investments should ease supply pressures.
(By Chris Mfula and Maxwell Akalaare Adombila; Editing by Jason Neely)
