Bloomberg News | August 29, 2024 |
KoBold Metals is involved in nearly 60 explorations projects across three continents. (Image courtesy of KoBold Metals.)
Zambia plans to establish an investment company that will control at least 30% of critical minerals production from future mines.
Mines Minister Paul Kabuswe unveiled a strategy on Thursday that he said will allow Zambia to maximize the benefits from its deposits of metals key to the energy transition. Africa’s second-largest copper producer aims to more than quadruple output of the metal by early in the next decade, but it also has deposits of cobalt, graphite and lithium.
The state will set up a special purpose vehicle to invest in critical minerals under a design framework that includes a “production sharing mechanism” setting aside a minimum 30% of the output from new mining projects, according to the document unveiled by Kabuswe in Zambia’s capital, Lusaka.
Miners including Barrick Gold Corp., First Quantum Minerals Ltd. and China Nonferrous Mining Corp. are investing in their Zambian copper projects. Zambia is also counting on the Konkola and Mopani copper mines — under the control of Vedanta Resources Ltd. and Abu Dhabi’s International Resources Holding respectively — to ramp up production.
The government’s goal of producing 3 million tons of copper a year by 2031 requires existing assets to double their output to about 1.4 million tons, according to a separate document prepared by Kabuswe’s ministry. Sites currently in the exploration phase – such as the Bill Gates-backed KoBold Metals’ Mingomba project – are expected to provide an ambitious 1.2 million tons annually.
The government also intends to make investors in the critical minerals sector allocate at least 35% of procurement costs to local suppliers, according to the strategy. It will also review Zambia’s policy and regulatory environment to restrict the export of unprocessed materials.
(By William Clowes)
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