ZAMBIA’S presidency has dismissed proposed regulations that would grant the state a minimum 15% stake in critical mineral mines without financial compensation, signalling its commitment to maintaining an investor-friendly environment.
A draft ‘satutory instrument’ from the mines ministry states that the government would be entitled to hold a “non-dilutable free-carried interest shareholding” in mines producing copper and other critical minerals, said Bloomberg News on Wednesday. The instrument included provisions to increase the stake to 40% which would be paid for through dividend forfeitures and tax concessions rather than cash, the newswire added.
“From the view of the presidency, it’s not something that will be brought to fruition, because we do not support it,” Jito Kayumba, President Hakainde Hichilema’s special assistant for finance and investment, said in Johannesburg last week. “Government has no desire to take a free carry or any consideration, without there being any financial consideration.”
The proposal would threaten approximately $10bn in pledged mining investments aimed at boosting copper production in Africa’s second-largest producer. Implementation would also contradict Hichilema’s efforts to position Zambia as an attractive investment destination and undermine his ambition to more than triple copper output.
The draft regulations also seek to declare cobalt, nickel and manganese as critical minerals whilst granting the state pre-emptive rights to purchase all domestically sold output.
Hapenga Kabeta, permanent secretary at the mines ministry, described the free-carry provision as “merely ideas” and said engagements with government and private sector stakeholders continue. The ministry aims to finalise regulations by year-end.
Hichilema, who took office in 2021, has prioritised unblocking stalled projects after previous administrations frequently altered tax regimes and clashed with operators. Zambians vote in general elections next August.
