🇿🇲 CONTEXT | Currency Shift in the Copper Economy
Zambia has quietly taken a consequential step in the management of its mineral revenues. For the first time, mining tax payments are now being received in the Chinese yuan, signalling a shift in how the country settles and stores value from its most important export sector.
The Bank of Zambia has confirmed that, beginning October 2025, Chinese mining firms operating in the country started paying mining taxes in Renminbi rather than US dollars. Until now, the standard arrangement since 2018 required mining companies to sell US dollars to the central bank, which would then remit the kwacha equivalent to the Zambia Revenue Authority. That framework covered mineral royalties introduced in 2018 and other mining-related taxes rolled out in 2020.
At a surface level, the change reflects trade reality. China is the dominant destination for Zambia’s copper, and several Chinese mining companies already receive part or all of their export proceeds in yuan. Settling tax obligations in the same currency reduces transaction layers and currency conversion costs for both firms and the state. For the central bank, it also aligns with a broader effort to diversify foreign exchange inflows beyond the US dollar.
Strategically, the move carries deeper financial implications. By accepting taxes in Renminbi, the Bank of Zambia is gradually reshaping the composition of its foreign reserves. The yuan now joins the reserve basket at a time when Zambia is emerging from a prolonged debt restructuring process and remains exposed to external financing pressures. Holding reserves in a currency linked to a major creditor offers flexibility, particularly in servicing Chinese debt, where direct currency alignment can lower exchange rate risk and settlement costs.
The policy shift also fits into a wider diplomatic and economic recalibration. In September 2023, Presidents Hakainde Hichilema and Xi Jinping elevated Zambia–China relations to a Comprehensive Strategic and Cooperative Partnership. Increased use of the yuan in official transactions reflects that upgraded relationship, placing Zambia within a growing group of resource exporters experimenting with non-dollar settlement frameworks in trade with China.
From a market perspective, the implications are incremental rather than disruptive. The US dollar remains dominant in Zambia’s external accounts, especially for fuel imports, debt service to non-Chinese creditors, and broader balance-of-payments management. But the yuan’s entry introduces optionality. It signals to investors and trading partners that Zambia is willing to adapt its financial architecture to the geography of its trade flows rather than rely exclusively on legacy currency structures.
Operationally, the Bank of Zambia has moved to support transparency by publishing the Kwacha–Renminbi exchange rate on its website from mid-November 2025. This provides a reference point for firms, government agencies, and markets as yuan-denominated transactions increase.
Contextually, this is less a dramatic break and more a calibrated adjustment. Zambia is not abandoning the dollar; it is hedging.
For a copper-dependent economy navigating recovery, reserve rebuilding, and geopolitical balance, the acceptance of mining taxes in yuan represents a pragmatic response to where its exports go, who its creditors are, and how it can manage costs in an increasingly multipolar financial system.
© The People’s Brief | Francine Lilu & Ollus R. Ndomu