UPDATE ON THE MINES AND MINERALS DEVELOPMENT SECTOR
Today, the Minister of Mines and Minerals Development Hon. Paul Kabuswe, MP held a press briefing to address the following issues in that Ministry:
✅Mopani Copper Mine (Mopani)
Mopani is an asset owned by the people of Zambia through ZCCM-IH. Government has faced numerous challenges with Mopani since Glencore’s departure and the subsequent takeover by ZCCM-IH. However, over the past six months, Government has been actively searching for a new investor for Mopani. Government has received non-binding offers from four bidders in April/May and recently received the bidding offers on Monday, July 10, 2023. The government intends to close the deal with the successful bidder by July 31, 2023. Rest assured, Government will inform the nation about the successful bidder after the evaluation of the binding offers.
✅Konkola Copper Mines (KCM)
In regards to KCM, it is important to note that the shareholding structure consists of 80% Vedanta Resources (VR) and 20% ZCCM-IH. Since VR’s departure in 2019, the provisional liquidator has managed KCM. However, due to ongoing litigations against the government in both Zambian and British courts, the previous arrangement was found to be unsustainable when the new government came into power in August 2021. Consequently, the government decided to re-engage VR as the 80% shareholder to invest in the mine. Government has been negotiating the terms and conditions of this engagement, with only one matter still outstanding. Government is hopeful that this matter will be resolved within the month of July, and the citizens will be duly informed. Government is fully committed to protecting their interests while resolving the issue.
✅Kasenseli Gold Mine (KGM)
The Ministry of Mines and Mineral Development suspended the exploration license of Zambia Gold Company (Zamgold) due to various violations. The two shareholders who owned exploration licenses in the Kasenseli Gold area agreed to transition into KGM when it was registered with PACRA. Under an agreement between the community and Zamgold, the shareholders have relinquished their shares in KGM. Negotiations are progressing well, and we anticipate concluding them before the end of July 2023.
✅Sugilite – Luapula Province
There have been recent reports about the discovery of the gemstone Sugilite in Mansa. This mineral has been found in two locations thus far, and there is a possibility of more discoveries. While the media has widely reported on Sugilite, we have yet to establish the full extent of this resource. Therefore, the Ministry of Mines and Minerals Development is developing a comprehensive strategy to guide the responsible and sustainable management of exploration, mining, and exploitation of this precious mineral for the benefit of the Zambian citizens. Government is already undertaking activities aligned with this strategy, and the nation will be informed as soon as the geologists complete their work.
✅Artisanal and Small-Scale Mining (ASM)
The Ministry of Mines and Minerals Development is implementing various activities to formalise the ASM subsector, which has experienced illegal mining activities in certain provinces. The aim is to promote the participation of Zambians across the mining value chain in a formalized manner. The Ministry of Mines and Minerals Development has been working closely with institutions such as the Ministry of Small and Medium Enterprises, the Ministry of Commerce, Trade and Industry, and the Ministry of Infrastructure, Housing, and Urban Development to facilitate the formalization of operations. Thus far, 52 mining cooperatives have been registered by the Ministry of Small and Medium Enterprise Development. Additionally, has approved a significant number of licenses from November 2022 to July 2023.
✅Minerals Regulation Commission
Institutional reforms are underway to enhance the regulation of the mining sector. One of the key reforms is the establishment of an independent mining regulator, the Minerals Regulation Commission. The commission will play a crucial role in monitoring and regulating mining activities, ensuring compliance, and combating lawlessness and illegality. The draft legislation for the establishment of the commission has been finalided and is currently with the Ministry of Justice for submission to Cabinet and subsequently to Parliament.
✅Three (3) Million Tonnes Strategy
To increase copper production in Zambia from the current average of 800,000 tonnes to 3 million tonnes in the next nine years, Government has developed a draft strategy. The key priority in achieving this target is geological mapping and mineral exploration. Government will collaborate with the private sector and other investors to enhance copper production from both brownfields and greenfield projects. Addressing the issues surrounding Mopani and KCM, as mentioned earlier, is vital for reaching this production goal.
✅Conditions Precedent to the 3 Million Tonne Strategy
To achieve an annual copper production of 3 million tonnes, Government is investing in the acquisition of geological information. This information will not only contribute to copper production but also help us understand the potential resources and quantities of other minerals in Zambia. The mapping activities will align with the energy transition and include a draft strategy on lithium and other critical minerals. The geological mapping and exploration will take place between May and November each year.
In conclusion, the prospects for the mining sector in Zambia are promising, and the Government is fully committed to increasing the sector’s contribution to the country’s GDP. Government aims to promote economic and social well-being for all Zambians, generate sustainable jobs, and manage the sector in a responsible manner. Government will continue implementing various policies and legislative measures to achieve these goals and secure the benefits for present and future generations.
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