The Zambian government has approved the establishment of a special purpose vehicle (SPV) aimed at increasing the country’s earnings from its mineral resources. This new initiative seeks to transition from the current dividend payment model to a production-based sharing mechanism, ensuring that benefits extend beyond statutory obligations to the people of Zambia, as reported by Reuters.
Production-Based Sharing Model and Price Negotiations
The new business model will allow for the sharing of produced minerals and enable the government to negotiate the prices of these minerals. The Cabinet emphasized the importance of this new entity in ensuring accurate declarations of mineral consignments for both export and domestic use.
ZCCM Investments and State Interests in Mining
Currently, the government holds mining interests through ZCCM Investments. The company has divested a 51% stake in Mopani Copper Mines to a subsidiary of the United Arab Emirates-based International Holding Company while retaining the remaining stake.
Earlier this year, Zambia’s Mines Minister, Paul Kabuswe, stated that the government aims to secure larger stakes in upcoming mining projects. The objective is to increase state revenue and encourage investors to allocate more funds toward social initiatives.
Copper Production and Future Targets
In 2023, Zambia’s copper production stood at 698,000 tonnes, down from 763,000 tonnes recorded in the previous year. However, the country has set an ambitious target of reaching an annual copper output of three million tonnes within the next ten years, anticipating growing demand from the electricity and construction sectors.
