Zambia, known as Africa’s second-largest copper producer, finds itself at a crucial juncture. The proposed Minerals Regulation Commission Bill, currently under consideration, has sparked significant concern within the mining sector. The legislation, aimed at regulating and monitoring the development of the country’s mineral resources, includes provisions that could reshape Zambia’s investment landscape—and not necessarily for the better.
The bill grants the Zambian government the ability to acquire a shareholding in exploration areas before licenses are granted. Additionally, it allows the Minister of Finance to maintain a shareholding in mining licenses on behalf of the government if valuable minerals, such as copper, are discovered. While these provisions may appear to bolster national control over precious resources, the reaction from the industry has been one of alarm.
Zambia’s Chamber of Mines (ZCM) and the Association of Zambian Mineral Exploration Companies (AZMEC) have voiced strong opposition, warning that the proposed law could deliver a “fatal blow” to Zambia’s ambitious goal of raising annual copper output to 3 million metric tons. The bill’s provisions, particularly the possibility of forced ‘free carry’ state acquisitions, are seen as a serious threat to property rights and investment security.
The concern is palpable. For a country seeking to attract more investors to boost copper production—especially in an era where copper is increasingly vital for the global energy transition—these proposed regulations could instead have the opposite effect. Investment risk in Zambia, as perceived by potential investors, may rise significantly, potentially stifling the much-needed influx of capital and expertise.
It’s important to note that Zambia’s recent history in the mining sector has been turbulent. The previous administration’s seizure of Konkola Copper Mines from Vedanta in 2019 sent shockwaves through the industry, leading to a decline in investor confidence. While President Hakainde Hichilema’s government has made strides to repair this reputation—most notably by returning Konkola to Vedanta—the new bill risks unraveling these efforts.
Zambia’s copper output already declined to 698,000 tons in 2023 from 763,000 tons the previous year, underscoring the challenges the sector faces. The proposed legislation, as it stands, could exacerbate these difficulties by creating an environment where the rules of engagement are seen as uncertain or unfavorable by the global mining community.
The stakes are high. Major players like Barrick Gold and First Quantum Minerals have invested billions into their Zambian operations, and the country needs to maintain an investment-friendly climate to realize its production goals. Moreover, the recent commitment by the United Arab Emirates’ International Resources Holding to invest $1.1 billion into expanding Mopani Copper Mines highlights the critical role of foreign investment in Zambia’s mining future.
As Zambia moves forward, it must carefully balance national interests with the need to attract and retain international investors. The path the country chooses could either propel it to new heights of copper production or, as industry bodies warn, deliver a fatal blow to its ambitions. The proposed bill requires thorough consideration and dialogue with all stakeholders to ensure that Zambia’s mineral wealth can fuel its development without alienating the very investors needed to bring this vision to life.
