PROPOSED ownership reforms in Zambia’s mining sector posed an “unprecedented threat” to investors’ rights, said the country’s Chamber of Mines.
The Chamber was commenting in an article by Bloomberg News on recently announced government plans to establish a state-owned firm. The new firm would control at least 30% of future mines’ production of critical minerals including copper.
President Hakainde Hichilema’s government has demonstrated a “serial unwillingness” to consult “meaningfully” with the mining companies, Bloomberg cited the Chamber as saying in an emailed statement on Tuesday.
The administration “risks undoing all the good work achieved” since coming to power in 2021 to attract investment to the southern African nation, which relies on copper for about 70% of export earnings, it said. First Quantum Minerals and Barrick Gold are among the Chamber’s members.
Africa’s second-biggest copper producer is targeting output of three million tons by early next decade – a sharp hike from less than 700,000 tons last year. Such an increase will require investors to transform multiple exploration projects into operating mines, said Bloomberg News.
A proposed law to overhaul governance of the mining sector would grant “unaccountable and arbitrary discretionary decision-making powers to individual regulators, presenting obvious future corruption risks,” according to the Chamber.
Subsidiaries of First Quantum and Barrick were Zambia’s largest producers of copper last year, accounting for about two-thirds of output, according to government data. Units of Vedanta Resources and Abu Dhabi’s International Resources Holding are also part of the mining chamber.
