GUEST ARTICLE: The truth about FQM, ZCCM-IH and the alleged $2.5 billion loss
By Dr. Catherine Mulaisho
Recent allegations have surfaced, accusing First Quantum Minerals (FQM) of misappropriating US$2.5 billion from ZCCM-Investment Holdings (ZCCM-IH) and externalizing the funds.
This claim is driven by a misrepresentation of arbitration proceedings that were brought by ZCCM-IH against Kansanshi Holdings (the arm of FQM that holds 80% of the Kansanshi Mining Plc) alleging that that between 2007 and 2014 cash reserves at Kansanshi Mining Plc did not attract a commercial rate of interest when they were deposited with FQM for use of FQM projects in Zambia.
The case was heard, including at Arbitration, High Courts of England, and Zambia. Documents are available to show how the matter was handled by the various courts and was covered in media – including in Diggers Newspaper on 1 August 2019 edition.
These current claims have clearly taken on a life of their own, spinning narratives that are largely politically motivated.
These accusations peddled in this narrative are not only misleading to the general public but also detrimental to Zambia’s economic stability and investor confidence.
Finance Minister Dr. Situmbeko Musokotwane, speaking in Parliament, categorically dismissed the allegations, affirming that Zambia did not lose US$2.5 billion, as falsely claimed. He clarified that no funds were lost.
At the time of the said transaction, all due taxes had already been paid by FQM, meaning that no public funds were misappropriated or lost. This straightforward explanation should have put the matter to rest.
However, certain political figures continue to peddle misinformation, either out of ignorance or deliberate intent to mislead. Such reckless statements not only misinform the public but also risk damaging Zambia’s credibility as a reliable investment destination.
First Quantum Minerals has been a key player in Zambia’s mining sector, significantly contributing to the country’s revenue base. Between 2020 and 2024, FQM, through its Trident and Kansanshi mines, paid a total of US$2.8 billion in corporate taxes and mineral royalties.
Additionally, ZCCM-IH, which holds a 20% stake in Kansanshi Mine, received US$540 million in dividends from FQM between 2009 and 2023. From 2022 to December 2024 alone, FQM paid approximately US$110 million in royalties to ZCCM-IH.
These figures underscore FQM’s critical role in supporting Zambia’s economic development. All these figures are available from regulatory filings, which FQM is mandated to make as a listed Canadian company each year – Tax Transparency and Contributions to Government Report – on www.first-quantum.com
The mining sector remains the largest contributor to government revenue. In 2021, it contributed to ZMW 38.98 billion (US$2.2 billion), which increased to ZMW 44.4 billion (US$2.5 billion) in 2022, demonstrating continued growth and investment.
This revenue is instrumental in funding public services, infrastructure development, and national programs. Without the contributions of responsible investors like FQM, Zambia’s economic progress would face serious setbacks.
Despite these undeniable facts, some political figures persist in misleading the public with false claims. Such irresponsible behavior has far-reaching consequences: it erodes public trust, destabilizes investor confidence, and shifts focus from real issues that require attention.
False accusations create unnecessary fear and confusion among citizens, while reckless statements can deter potential investments. Furthermore, instead of addressing pressing economic and developmental challenges, the country gets distracted by unfounded political narratives.
Zambia must demand accountability—not just from corporations but also from those who exploit misinformation for political mileage.
The spread of falsehood undermines the country’s economic prospects and discourages the very investments needed to drive growth.
The mining industry is the backbone of Zambia’s economy, and maintaining a conducive business environment is crucial. As a nation, Zambia must prioritize fact-based discourse over sensationalism.
The government has made it clear—no US$2.5 billion was lost. Now, it is time to move forward and focus on strategies that will further grow the mining industry in Zambia and strengthen the country’s economic standing.
Political figures and the public alike must work towards fostering transparency, accountability, and a pro-investment climate.
Companies like FQM continue to demonstrate their commitment to transparency and Zambia’s economic progress. It is in the nation’s best interest to support and engage with investors constructively rather than destroying local and international investor confidence through iterating baseless allegations.
As of now, Zambia stands at a pivotal moment in its economic journey. By upholding truth, encouraging investment, and recognizing the contributions of key economic players, the country can solidify its position as a leader in Africa’s mining industry and a beacon of sustainable development.
Let’s choose progress over propaganda, facts over fiction, and stability over sensationalism.
Kalemba February 25, 2025