Zambia strives to become the world’s second-biggest copper producer after Chile by the year 2030, and its government believes that copper mining has the potential to transform the country’s economy. 

In 2022, Zambia produced 770,000 metric tonnes (mt) of the metal, but the government would like to raise production to 3mn mt by 2030. Last year, Chile produced 5.2mn mt, followed by Peru and the Democratic Republic of the Congo (DRC), both at 2.2mn mt, and China at 1.9mn mt.

Zambia was ranked the world’s ninth biggest producer in 2022 but possesses some of the planet’s highest-grade copper deposits, which are mostly sediment-based. 

Copper’s critical role in electric vehicle (EV) batteries and other green energy technologies has led some to call it ‘the new oil’. The global thirst for copper is expected to jump by 20% by the year 2035, on the back of burgeoning demand from EVs, electricity transmission grids and renewable power generation. 

As well as copper, Zambia is home to small, exploitable deposits of cobalt, nickel and manganese. The country also produces about 20% of the world’s emeralds. There are also prospects in uranium, gold, coal mining and diamond and gas exploration. Opportunities exist in exploration, mine services, water management, engineering, construction and environmental services.

The main copper-mining region is the Copperbelt province, centred on the cities of Kitwe and Ndola. The largest mines are Kansanshi, Konkola, Lumwana and Mufilira in the Copperbelt province, and Sentinel in the Northwestern Province. Copper contributes over 70% of the country’s foreign export earnings. 

Most of Zambia’s modern copper production now comes from outside the Copperbelt, through large opencast mines in the neighbouring Northwestern province where investments to expand operations are underway or being considered. 

Mines on the Copperbelt have been costly to operate because they usually extend deep underground, with heavy demands on water use and energy. However, the mines still attract interest because the deposits contain relatively high-quality reserves of copper, which is heading for a shortfall as the worldwide transition to ‘clean’ energy and electrification gathers pace. 

The Zambian mining sector is governed and regulated by the Mines and Minerals Development Act Number 11 of 2015. It covers types of mining rights, acquisition of mining rights, rights/obligations conferred on the mining right holder, transferability of mining rights, safety, health, and environment requirements, and provides for the environmental protection fund, mineral royalties, fees and charges, and export of minerals.

Unfortunately, mining in Zambia picked up a bad reputation under the previous government of President Edgar Lungu, who was in office between January 2015 and August 2021. During his era, mining companies faced insecurity of tenure, high royalty rates and the withholding of VAT refunds. 

In 2019, Vedanta, the Indian group owned by Anil Agarwal, lost control of Konkola Copper Mines (KCM), one of Zambia’s biggest copper mines, when the Lungu government accused the group of a lack of investment and used a 20% stake in the mine to place it in provisional liquidation. KCM struggled to keep operating under state control. In 2021, Lungu’s government also paid $1.5bn to buy Mopani Copper Mines — located in the Copperbelt region — from Glencore but, since that time, the mine has also experienced production problems. 

Konkola’s copper production dropped to 100,000 mt a year but it has a nameplate capacity of 300,000 mt. Mopani’s production has fallen to around 80,000 mt a year, a far cry from its potential 225,000 mt. 

In August 2021, President Hakainde Hichilema — known as HH — took office for a five-year term and has managed to create a more favourable investment climate. He has tried to clean up the country’s cadastral system after widespread licensing problems, restructure Mopani, settle the Konkola disputes and address the country’s power crisis.

The mining cadastre — which records the geographical location, ownership and time validity of mining rights — was subject to a detailed audit over eight months. Officials from the new government went through every single major licence with a fine toothcomb and threw out those that had not been properly awarded. 

In September 2023, it was announced that Vedanta would take back control of Konkola. The company will invest $1bn over five years to revive the mine. It will also make $250m of payments to local creditors of the mine to restore its majority stake. In December 2023, the Zambian government selected International Resources Holdings (IRH) — a metal exploration services company linked to Abu Dhabi's most valuable listed company, International Holding Company — as its new strategic equity partner in the Mopani Copper Mines. IRH will help Mopani with short-term working capital and finance the completion of the mine’s development. They are aiming to increase copper production to at least 200,000 mt a year. 

Exploration is also an important aspect of Hichilema’s investment drive into Zambia’s minerals sector. Currently, the government is undertaking geological mapping for the remaining 45% of the country, while the existing 55% will be updated. One of the factors that is attracting international mining groups to the country is the fact that a lot of its geography remains unexplored. 

During the past two years, a string of foreign mining groups have announced investments in the mining sector. In October 2023, China Non-Ferrous Metals Mining Corporation, the Chinese state-owned mining major, said it planned to invest $1.6bn in its Zambian subsidiary, NFC Africa Mining, which operates the Chambishi mine in northern Zambia. 

In September 2023, First Quantum Minerals (FQM), the Canadian copper major, signed a contract with MECS, a subsidiary of Elessent Clean Technologies, the American company that makes process technologies, to expand the smelter at its Kansanshi mine in Solwezi.

The MECS scope will include a redesign of the existing sulphur-burning sulphuric acid plant into a copper smelter off-gas recovery sulphuric acid plant. In December 2023, FQM also inked a deal with Zambia’s Mimosa Resources to fast-track their joint development of the Fishtie copper project in Central Province, near the border with the DRC. 

The companies, which have been exploring the asset since 2012, now see Fishtie kicking off production in 2026, ramping up production to 30,000 mt of copper a year by the end of the decade. Currently, Mimosa owns 37.5% of Kashime Copper, which holds the Fishtie project. The agreement with First Quantum will see Mimosa’s stake grow to 75%, through the completion of a feasibility study and the raising of the necessary financing to take the project to technical completion. 

FQM also owns the Sentinel Mine, a large copper mine located in North-Western province. It has a single reserve of copper ore, measuring an estimated 1.03bn mt of ore with a copper content of 0.51% or about 5.2m mt of pure copper. It is expected to yield about 300,000 mt of copper concentrate annually over a 15-year productive lifespan.

Furthermore, Barrick Gold, the Canadian mining major, plans to invest almost $2bn in an expansion of its Lumwana copper mine located 100km west of Solwezi. It aims to increase annual production to 240,000 mt of copper from a 50m mt per annum process plant over a 36-year life of mine. The move is part of the company’s wider plan to extend the life of the mine to 2060. Barrick said it aims to complete the full feasibility study by the end of 2024, bringing the expanded production forward to 2028.

KoBold Metals — a Californian-based metals explorer that uses Artificial Intelligence and is backed by billionaires Bill Gates and Jeff Bezos — plans to invest around $150m to accelerate exploration work at the Mingomba project in Copperbelt province to uncover additional copper and cobalt deposits. As per KoBold estimates, the Mingomba mine holds 247mn mt of ore with an average grade of 3.64% copper.

Midnight Sun Mining, the Canadian junior, is looking for a partner to advance its Solwezi copper project, which covers 506 sq km and is big enough for multiple large systems to exist on the property. 

In April 2023, Anglo American, the British multinational mining company, announced a return to full-scale copper exploration after it signed a provisional joint-venture agreement with Aim-listed mining and exploration company Arc Minerals. The exploration will take place in the Northwestern province. 

Zambia would like to become a lot more involved in ‘beneficiation’ or value-added processing. This involves the transformation of a primary material (produced by mining and extraction processes) to a more finished product that has a higher export sales value.

In December 2022, the US, Zambia and the DRC signed a Memorandum of Understanding to develop an integrated value chain in the EV battery sector, which would involve the creation of a special economic zone. It has been widely perceived as a US-backed move to counter China’s involvement in the supply chain of critical minerals in Africa. The initiative is being backed by the African Export-Import Bank (Afreximbank) and the first feasibility study on the Zambian side should be delivered in December 2023. 

Zambia’s copper deposits are big — Ivanhoe’s Kamoa Kakula runs up to 2.92% copper, Kansanshi is about 0.66%, Sentinel's 0.51% and Lumwana is about 0.55%. However, mining on such a scale in the country has come at an environmental cost. Many years of mining in the Copperbelt have produced a large volume of waste material, including slag from the copper refining process. It contains elements such as chromium, which is known to be a potentially harmful element. 

In December 2023, a South African court is expected to rule on whether a class action lawsuit can be brought against Anglo American over claims of historical lead poisoning in Zambia. Anglo American denies responsibility.

Industry experts say that the best thing that Zambia can do for its investor community is to secure a stable policy environment, even though its taxes are some of the highest in the world. An established mining framework —which governs the awarding of licences and mining regulations — is essential. Strong rule of law that enforces these regulations is also necessary. The country’s debt issues have not been a significant deterrent for potential investors but its ever-changing royalty rates have discouraged them. 

Zambia has become a tier-one destination for mining investors. It has great geology but is highly under-explored, taking into account the quality of the discoveries already made there. Despite being a well-established copper-producing country, a lack of exploration attention provides shrewd investors with access to potentially significant untapped resources.

— Jason Mitchell is a British financial journalist, based in Africa, who writes about emerging markets, including Africa, the Middle East and Latin America. He specialises in topics related to wealth creation, mining, capital markets, banking and conservation.