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Mining & Natural Resources
OVERVIEW
Zambia is the largest producer of copper in Africa, as
well as being a major source of minerals such as co-
balt, zinc, lead, uranium, and other precious metals
and stones. The Copperbelt is the epicentre of the
Zambian mining industry as well as home to the vast
majority of the country’s industrial activity, and has
been one of the major drivers of economic growth
in recent years.
Zambia’s rich mineral resources, in particular its cop-
per and cobalt mines, have brought much needed
foreign exchange earnings to the country. Privatiza-
tion of the formerly state-owned mines, along with
many years of high an increase in demand and com-
modity prices including copper, has seen a great
deal of investment in the mining industry and an ex-
pansion in mineral production. It has also led to the
establishment of new mines and the recapitalization
of existing ones.
The country’s vast mineral reserves include an esti-
mated 10% of the world’s known reserves of copper
and 34% of its cobalt. The Copperbelt alone contains
a total mineral resource reserve of at least 2 billion
metric tonnes. In addition to huge reserves of cop-
per and cobalt, Zambia also possesses a variety of
precious and semi-precious minerals, such as ame-
thyst, aquamarine, emeralds, gold, silver, diamonds
and selenium. Other known mineral resources,
which are largely underexploited, include marble
and granite as well as ferrous metals. Minerals that
can be profitably quarried for use in the manufac-
turing, building and agricultural industries are clay,
limestone, gypsum and phosphate.
HISTORICAL BACKGROUND AND
RECENT DEVELOPMENTS
After independence in 1964, the copper industry was
seen as being so central and strategic to the coun-
try that a programme of nationalization was begun.
Zambia’s two main mines were nationalized in 1969,
with copper production and refining being carried out
by large state-run enterprises. These parastatal enti-
ties contributed massively to Government revenue
during the early 1970s when copper prices were
high and the economy of Zambia was booming, and
copper production reached a record high of some
750,000 metric tonnes per year. However, Zambia’s
copper industry began to decline following a dramat-
ic drop in price of copper in the mid 70s.
Political change in 1991, led to a thorough restructur-
ing of the Mining and Mineral Exploration Sector in
Zambia. The adoption of a more outward oriented
and free market approach together with an investor-
friendly legislative framework (primarily through The
Mines and Minerals Act 1995) revitalized the indus-
try.
This was enhanced by the privatization of the major-
ity of Zambia Consolidated Copper Mines (ZCCM)
mining assets and associated operations (e.g. con-
centrators, smelters and refineries) between 1998
and 2002, which has resulted in over US$6 billion
worth of foreign direct investment by international
mining companies since then. The positive growth
and investment has also been furthered by very
strong international copper and cobalt prices espe-
cially since 2007.
Many existing operations have been rehabilitated
and refurbished, new operations have been brought
into production and exploration has flourished.
This has resulted in a very significant increase in the
production of copper. From a total of 257,000 metric
tonnes produced in 2000, copper production in Zam-
bia has increased during each subsequent year and
is well on course to exceed 700,000 tonnes in 2010,
its highest levels since the early 1970’s.
The last five years have, however, not been without
challenges. The enactment of the new Mines and
Minerals Development Act 2008 and the revision of
Zambia’s Mining Sector fiscal regime in the same
year (both viewed by the industry as being generally
over-complicated and investor unfriendly) combined
with the global financial crisis of 2008-9 effectively
threatened to arrest this growth.