(Ecofin Agency) – To increase its mining revenues, the Zambian government has been working for several months on a project aimed at directly marketing part of its mining production. Copper is the southern African country’s top export product and will be at the heart of this new policy.
In Zambia, the Council of Ministers on June 11 approved the creation of a “special purpose entity for investment and trading of mineral resources“. According to the report of the meeting published the next day, the executive wants to replace dividends with a mechanism for sharing production, including that of copper, the country’s leading export product.
For the authorities, this new model will allow Zambia to guarantee the availability of raw materials for actors active in local processing and to negotiate its own prices for minerals on the international market. The government could thus compete with global copper trading giants, such as Trafigura and Glencore.
The possibility for Zambia to directly market part of its copper production was mentioned in February 2024 by Jito Kayumba, principal economic advisor to President Hakainde Hichilema. Present at the Mining Indaba conference in South Africa, he indicated that a “limited amount of approximately $100 million» could initially be devoted to launching this activity.
Note that the government has not specified the terms of implementation of this project with the companies currently exploiting Zambian copper. In the country, the main producers are First Quantum Minerals, Barrick Gold, Vedanta Resources and China Non-Ferrous Metals Company. They have not yet commented on the Zambian government’s project.
As a reminder, similar initiatives have been implemented by countries such as Ghana and Zimbabwe in recent years, without encountering opposition from mining companies. In Ghana, the government decided to buy part of the gold produced by companies in order to pay suppliers of refined petroleum products, while Zimbabwe obtains payment of part of its mining royalties in gold bars.
Emiliano Tossou
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06/02/2024 – Zambia will compete with the giants of commodity trading by directly selling part of its copper
