Zambia Set to Receive $30M Investment for Digital Transformation
Indian software company Zoho Corp., in partnership with Loita Business, is set to invest $30 million in Zambia to encourage technology adoption and digital transformation for small and medium enterprises and large enterprises.
The investment program is set to be launched during the inaugural Zambia Digital Week 2025, running from January 28–30, 2025, at the Mulungushi International Conference Centre, Lusaka, Zambia.
Zambia Digital Week 2025, brought to you by Loita Business in collaboration with the Ministry of Technology and Science in Zambia, Smart Africa, African Export-Import Bank (Afreximbank), Digital Council Africa, and Invest Africa, brings together local, regional, and global leaders from government, business, and international organisations to collaborate in new ways to advance Zambia’s digital economy and shape, accelerate, and sustain Zambia’s ongoing digital revolution.
Zoho Corp. has been present in Zambia for the last five years and intends to bolster Zambia’s economic sustainability and its wide-sweeping digitalization goals.
“We believe Zambia offers attractive opportunities for growth and expansion,” said Andrew Bourne, Regional Manager, Zoho Africa.
Zoho’s fundamental vision is led by efforts to make innovative solutions accessible and affordable to businesses of all sizes. With this at the core, we allocate necessary resources to cater to these rapidly growing markets to empower more people and organizations.The cloud software vendor has been in business for 29 years and has around 15,000 employees. It has 100 million registered users using its software worldwide from over 50 countries.
The company, explained Bourne, has over 55 business applications catering to sales support, marketing, HR, payments, and finance, to name a few. “We have more than half a million registered organizations paying customers using Zoho,” he said.
Zoho has also increasingly started working with local government entities and public sector institutions in Africa and across the world.
“Over the next year, we aim to continue leading the way in the MEA to make Africa our No. 1 market in the region while allocating necessary resources to help achieve the government objective of having a fully digitalised, upper-middle income economy. Our mission is to help Zambia achieve its digital transformation goals by lowering the technical barriers to entry for the SMEs and enterprise business community,” added Bourne.
This article originally appeared on IT News Africa
BackChat Season 3 Episode 5: Stanbic Bank, GreenCo and FQM
This week we spoke to Helen Lubamba of Stanbic Bank Zambia and Wezi Gondwe of GreenCo following a monumental $55 million facilities agreement between the two organisations. With many sectors reaping the benefits of the agreement, Jed Goldstein of FQM Zambia also joined us to discuss these gains related specifically to the mining sector.
From Jubilee to Prosperity: Leveraging The Next 60 Years of Zambian Independence
By Dr. Kiru Sichoongwe
This year, Zambia is celebrating its diamond jubilee, marking 60 years of independence. It presents an opportune time to reflect on the country’s journey and anticipate how the next sixty years can be optimized for economic development. This milestone not only allows us to acknowledge past achievements but also to chart a path for long-term economic growth. The past six decades encompassed both challenges and successes, and this juncture serves as a crucial moment to build upon our accomplishments while tackling the obstacles that lie ahead.
The journey from jubilee to prosperity requires us to harness national resources, adopt innovative policies, and cultivate partnerships that can inspire growth for future generations. This blog outlines key strategies that Zambia can implement to reshape its economic landscape over the next sixty years.
Zambia gained independence from British colonial rule on October 24, 1964. Despite an abundance of natural resources like copper, cobalt, and fertile land, Zambia still has challenges to overcome, including high poverty rates, unemployment, and inadequate infrastructure. As the nation embarks on the next phase of its development, it is essential to critically evaluate these historical challenges and identify pathways for improvement.
Zambia, as a land-linked country in southern Africa, possesses diverse sectors ripe for growth and development over the coming sixty years. By adopting a multifaceted approach focused on sustainable growth, inclusive development, and optimizing both resources and human capital, Zambia can effectively advance its economic goals.
Below is my analysis of key sectors where Zambia holds comparative advantages, along with strategic recommendations for leveraging these sectors for future growth.
Agriculture
Agriculture is vital to Zambia's socio-economic development, employing 51% of the workforce. More than half of the population relies on agriculture for food, primarily through smallholder farming. Furthermore, agriculture supplies raw materials for manufacturing and food processing, creating additional job opportunities, particularly for women and youth.
The sector also contributes significantly to Zambia's export earnings, generating about 29% of non-traditional exports and 7% of total exports. Therefore, agriculture is a promising avenue for achieving diversified and inclusive socio-economic growth.
Strategies for leveraging:
Agri-technology Adoption: Promote modern agricultural techniques and technologies, such as precision farming, to enhance yields.
Diversification: Encourage farmers to diversify into high-value crops, such as fruits and vegetables, reducing dependency on maize.
Value Addition: Invest in agro-processing industries to enhance value addition to agricultural products and minimize post-harvest losses.
Zambia’s government has set ambitions to become the breadbasket of southern Africa.
Progress to date
Significant steps have already been taken to capitalize on agricultural opportunities through the Comprehensive Agriculture Transformation Programme, which enhances support for farmers in areas such as mechanization, marketing, and processing.
President Hichilema’s New Dawn government is firmly committed to boosting agriculture and agro-processing, as evidenced by the establishment of an Agriculture Credit Window within the transformation programme. This initiative has garnered participation from five commercial banks, facilitating the release of $5.5 million from the African Development Bank towards the Sustainable Agricultural Financing Facility (SAFE), alongside K200 million from the Zambian government.
Together, these funds will amount to a total of $18.5 million, supported by an 80% risk mitigation strategy. Additionally, the National Agriculture Diversification Strategy has been implemented, and an Agriculture Mechanization Policy has been launched to further enhance productivity within the sector.
Mining
Zambia is one of Africa's largest copper producers, with abundant supplies of cobalt, gemstones, and other minerals as well. The mining sector is crucial to Zambia's economy, significantly contributing to GDP, tax revenues, and export earnings. In 2023, mining accounted for 13.7% of Zambia's GDP, up from 12.9% in 2022, and was the second-largest contributor to GDP in both 2023 and in the first quarter of 2024.
Strategies for leveraging:
Local Content Policies: Implement policies that promote local processing of minerals to bolster the domestic economy.
Sustainability Initiatives: Invest in sustainable mining practices that protect both the environment and local communities.
Public-Private Partnerships (PPPs): Foster collaborations between the government and private sector to enhance infrastructure and investment within the mining sector.
Progress to date
The government has made significant strides in enhancing the mining sector, underlining its commitment to fostering local participation and attracting foreign investment. A landmark achievement includes securing a USD 100 million partnership between Moxico Resources and Mimbula Mineral Resources for copper exploration, a key focus given the country's rich mineral deposits.
Furthermore, the registration of 256 local mining cooperatives, alongside the issuance of licenses to 126 gold mining cooperatives and 65 artisanal cooperatives for other mineral exploitation, reflects a strong push towards empowering local stakeholders.
In a significant boost to the sector, KoBold Metals has invested USD 150 million into the Ming’omba Mining project in Chililabombwe, highlighting the growing international confidence in Zambia's mining potential. Additionally, the government successfully negotiated an increase in its shareholding in the newly revitalized Mopani Mine from 20% to 49%, aligning with its policy to enhance local ownership in mining firms and ensure that the benefits of mineral wealth are more widely shared among Zambians.
The New Dawn government aims to produce 3 million tonnes of copper by the early 2030s.
Tourism
Zambia is a premier tourist destination in Africa, celebrated for its natural wonders, including its stunning waterfalls, lakes, and rivers, which represent nearly 35% of Southern Africa's water resources. About 32% of the country's land is designated as wildlife-protected areas, contributing significantly to economic development by generating jobs and foreign exchange.
Tourism is primarily centered around wildlife conservation areas, with 20 national parks and 34 game management areas. Victoria Falls, a UNESCO World Heritage site, is among Zambia's most iconic attractions.
Strategies for Leveraging:
Infrastructure Development: Invest in infrastructure (roads, airports, accommodations) to improve accessibility for tourists.
Marketing and Promotion: Create a robust branding strategy to position Zambia as a leading tourist destination.
Community-Based Tourism: Promote responsible and sustainable tourism practices that benefit local communities.
Ecotourism and Cultural Tourism: Develop initiatives that highlight Zambia’s natural and cultural heritage.
Victoria falls, known as ‘the smoke that thunders’ in the local Lozi language.
Progress to date
The New Dawn government is implementing a multifaceted approach to boost both accessibility and promotion in the tourism sector. Key developments include the construction of 3,297 kilometers of access roads and 3,889 kilometers of loop roads in selected national parks, which facilitate easier travel to these natural wonders.
Additionally, the government has crafted a comprehensive tourism marketing and promotion strategy, and secured USD 100 million in World Bank funding aimed at developing the northern and western tourism circuits.
To further amplify its global reach, tourism secretaries have been deployed to key embassies around the world to spearhead marketing efforts. As a testament to these initiatives, visits to national parks, waterfalls, and heritage sites surged by 22 percent in 2022, with 605,650 tourists recorded, up from 496,456 in 2021, largely attributed to the removal of visa requirements for several countries.
By the third quarter of 2023, international tourist arrivals reached an impressive 987,080, highlighting the effectiveness of the government's strategic interventions in revitalizing Zambia's tourism landscape.
Renewable Energy
Zambia boasts significant hydropower potential, alongside solar, wind, and biomass resources.
Strategies for leveraging:
Investment in Renewable Technologies: Attract foreign investment for renewable energy technology to strengthen capacity.
Decentralized Energy Solutions: Promote off-grid renewable energy options in rural areas to expand electricity access.
Regional Power Trade: Explore opportunities for regional energy trading with neighbouring countries to optimize resources.
Sustainability Policies: Formulate policies that encourage sustainable energy generation and reduce reliance on fossil fuels.
Progress to date
Zambia’s government is committed to advancing the generation, transmission, and distribution of renewable energy, with notable developments showcasing this dedication. ZESCO, the state-owned power utility, recently signed a landmark USD 3.5 billion deal with China CiEG to bolster renewable energy production in the country.
In a parallel effort, ZESCO entered into a Memorandum of Understanding and a Joint Venture Development Agreement with Masdar of the UAE, paving the way for an impressive USD 2 billion investment in solar projects. With the commissioning of an additional turbine at the Kafue Gorge Lower Hydro Power Station, Zambia's national installed capacity has risen to approximately 3,800MW.
Significant efforts are also underway to expand solar energy access, evidenced by the establishment of 11 solar mini-grids, the installation of 100 solar PV systems at health centers, 200 solar home systems for households, and 79 solar home systems for chiefdoms. Furthermore, the Kabwe 100MW Solar Photovoltaic Project, set to become Zambia’s largest solar power plant, broke ground in February 2024, further underscoring the government's commitment to sustainable energy development and its proactive approach to implementing policies that promote the growth of the energy sector.
Manufacturing Sector
The manufacturing sector is crucial for Zambia's economic growth and job creation. Recognized as a key driver for transformation and employment opportunities in the Eighth National Development Plan (8NDP), a focus on local value addition and development of complete value chains can lead to a more diversified economy and sustained growth.
Strategies for everaging:
Skill Development: Facilitate training programs to enhance the workforce's skills to meet industry demands.
Market Access: Negotiate trade agreements to improve access to regional and international markets for manufactured goods.
Support SMEs: Establish support mechanisms for small and medium enterprises (SMEs) to encourage innovation and job creation in manufacturing.
Progress to date
The Zambian government's commitment to revitalizing the manufacturing sector is evidenced by several significant developments. Notably, the revival of Mulungushi Textiles stands out as a pivotal initiative, aiming to restore the textile industry to its former glory and create employment opportunities for local communities.
Additionally, the reopening of the local fertilizer manufacturing plant is a crucial step towards achieving self-sufficiency in agricultural inputs, while the anticipated establishment of a car battery manufacturing plant represents a forward-thinking approach to diversifying the industrial base.
Furthermore, the rejuvenation of Kafue Nitrogen Chemicals of Zambia (NCZ) not only enhances domestic production capacity but also aligns with the government's vision of sustaining economic growth through local industrialization. Collectively, these initiatives underline the government's strategic push to bolster the manufacturing sector and foster a more resilient economy.
ICT and Digital Economy
The digitalization of the economy is a pivotal driver for social and economic growth in Zambia. Harnessing the opportunities of digitalization can help the government achieve its development goals and foster sustainable economic advancement. Zambia's tech-savvy youth population positions the country favourably within the digital economy.
Strategies for Leveraging:
Infrastructure Investment: Invest in internet infrastructure to improve connectivity throughout urban and rural regions.
Digital Skills Training: Implement programs to enhance digital literacy and technical capabilities among youth.
E-Governance: Utilize technology to improve governance, service delivery, and transparency in public administration.
Steps taken to date to leverage each opportunity
In a landmark initiative aimed at propelling Zambia's digital landscape forward, the government launched the E-MARK Innovation Hub in November 2024. This innovative hub promises to transform the tech and entrepreneurial ecosystem by offering startups, small and medium enterprises (SMEs), and creatives access to state-of-the-art resources, collaborative working spaces, and comprehensive skills development programs. Such advancements highlight the government’s commitment to nurturing a vibrant digital economy and empowering the next generation of Zambian innovators.
Conclusion
To leverage Zambia's comparative advantages, a long-term vision, strategic policies, and collaborative efforts between government, private sector, and civil society are essential. By focusing on these key strategies and establishing a comprehensive, long-term developmental policy that engages all sectors of society, Zambia can make significant progress toward sustainable economic development over the next sixty years.
About the Author:
Dr. Kiru Sichoongwe is a Zambian economist currently serving as a Research Fellow in the Department of DSI/NRF South African Research Chair (SARChI) in Industrial Development at the University of Johannesburg, South Africa.
Disclaimer: The opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of the institute where the author is affiliated.
Zambia Investor Briefing: November
OVERVIEW
MINING: President Hakainde Hichilema has announced that British mining giant Anglo American is strongly considering a return to Zambia. China Nonferrous Metal Mining Company has pledged an investment of $1.6 billion into its Luanshya Mining project and other assets on the Copperbelt. Japanese trading house Mitsui & Co is reportedly the highest bidder for a minority stake in First Quantum Minerals’ (FQM) Zambian copper assets. The President’s special assistant for finance and investment has announced that the government’s plans to take larger stakes in some mining projects will not impact existing operations.
ENERGY: The government is considering plans for a $900 million 600MW coal power plant, proposed by Chinese-owned Wonderful Group. The African Development Bank Group’s Board of Directors has approved an $8 million concessional loan to support the construction of a Solar Photovoltaic power plant. Africa GreenCo Group has secured a $55.5 million financing agreement with Stanbic Bank Zambia and Standard Bank of South Africa to support electricity imports and mitigate Zambia's energy challenges.
FDI: Chinese firm Powerful Diligent Veracious (PDV) Metals Limited Steel has commissioned a state-of-the-art manufacturing plant in the Lusaka South Multi Facility Economic Zone. President Hichilema met with a delegation of German industry led by the country’s Minister of Agriculture Cem Oezdemir.
A CLOSER LOOK
Mining Developments
President Hakainde Hichilema has announced that British mining giant Anglo American is strongly considering a return to Zambia, 20 years after the company stopped operating in the country. Writing on Facebook, President Hichilema said he had hosted a delegation from Anglo American at State House, including the company’s CEO Duncan Wanblad. “We are glad to note the renewed interest by Anglo American Corporation to invest in our mining sector after close of 20 years of their exit,” the President wrote. “The 3 million tons annual copper production target we have set for ourselves will require partnerships with reputable mining companies like Anglo American corporation.”
President Hichilema also met with a delegation from China Nonferrous Metal Mining Company (CNMC) led by CEO Wen Gang. CNMC pledged an investment of $1.6 billion into its Luanshya Mining project and other assets on the Copperbelt.
Meanwhile, in welcome news to investors, President Hichilema’s special assistant for finance and investment Jito Kayumba has told Bloombergthat the government’s plans to take larger stakes in some mining projects will not impact existing operations. According to Kayumba, “No entity that currently operates in Zambia today, that currently has a licence, will be subjected to any appropriation from the state”. Instead, the scheme will apply only to permits reserved for the government with the intention on bringing on investment partners. This follows President Hichilema’s reassurance to investors at the inaugural Zambia Mining and Investment Insaka last month that the government will not embark on a controversial reform of the mining sector until it has reached consensus with the country’s mining companies.
This comes as Anthony Mukutuma, country director at First Quantum Minerals (FQM), told The Africa Report, “There is renewed faith by investors in Zambia’s mining sector and the country shall start seeing the results soon… the brownfield developments alone can take output to 1.6 million tonnes in the next four to five years”. Mukutuma also said he was “very optimistic” about FQM’s 2025 outlook in Zambia. Regarding recent energy issues during Zambia’s drought, he pointed to the recent emergence of power traders making energy imports easier, as well as the strong start to the rainy season last month aiding hydropower production.
In other mining news, Japanese trading house Mitsui & Co is reportedly the highest bidder for a minority stake in First Quantum Minerals’ (FQM) Zambian copper assets, which includes Sentinel and Kansanshi mines. It is thought the company is considering a 20% stake for around $2 billion. This follows reports in October that Saudi Arabia’s Manara Minerals was close to finalising a deal with FQM, but it now seems to have been outbid. The company’s CEO Robert Wilt had previously told Reuters, “We are looking at Zambia, we are talking with a company there, with a mine there, so those are pretty advanced stage discussions.”
Energy Projects
The government is considering plans for a $900 million 600MW coal power plant, proposed by Wonderful Group. This would be an alternative energy source to help revive the country’s power supply after the impact of the recent unprecedented drought on Zambia’s hydropower. Gilbert Temba, Chair of Chinese-owned Wonderful Group, and his delegation met with President Hichilema this month to discuss the possible venture.
This follows the announcement in July that a 300MW coal-fired facility would be built in the south of the country. Its construction is being led by Maamba Collieries Ltd, which secured $300 million in financing for the project. Work is expected to be completed by July 2026. These projects align with national goals to diversify the energy mix and lessen reliance on weather-dependent hydropower, and will be a welcome boost to the growth of the country’s energy sector.
In other energy news, The African Development Bank Group’s Board of Directors has approved an $8 million concessional loan to support the construction of a 25MW Solar Photovoltaic power plant in Zambia. The plant development, led by Serengeti Energy Ltd and Western Solar Power Ltd, will serve as a pilot for GreenCo Power Services’ (the operating entity of Africa GreenCo Group) energy aggregator model under the ZESCO open-grid framework.
In other GreenCo news, the group has secured a $55.5 million financing agreement with Stanbic Bank Zambia and Standard Bank of South Africa to support electricity imports and mitigate Zambia's energy challenges. Through its subsidiary, GreenCo Finance Solutions Limited, the company will use the funds to prepay for over 130MW of electricity.
Foreign Direct Investment
Chinese firm Powerful Diligent Veracious (PDV) Metals Limited Steel has commissioned a state-of-the-art manufacturing plant in the Lusaka South Multi Facility Economic Zone. PDV acquired an Investment Licence from the Zambia Development Agency (ZDA) in 2023 and benefitted from both fiscal and non-fiscal incentives facilitated by the Agency. Later in the month the ZDA signed an Investment Promotion and Protection Agreement with China De Jin Xin Limited to construct a $170 million cement plant in Chilanga District – of which $70 million is already invested.
Earlier this month President Hichilema met with a delegation of German industry led by the country’s Minister of Agriculture Cem Oezdemir. The President expressed his eagerness to collaborate with German business in “capital mobilisation, the exploration of critical minerals using advanced technology, and value addition.”
Finally, the Zambia Development Agency (ZDA) participated in the COMESA Business Forum and Exhibition in Bujumbura, Burundi at the end of October. The Agency also participated in the Kenya-Zambia Trade Expo hosted by the Kenya National Chamber of Commerce and Industry (KNCCI) and the Zambia Chamber of Commerce and Industry (ZCCI).
LONG READS
As drought shrivels hydro, this African nation pivots to solar (Yale Environment 360, 21.11.24)
Zambian economy will recover in 2025 as headwinds fade (Fitch Solutions, 21.11.24)
US and Chinese rail projects boost Zambia’s copper industry (The Africa Report, 13.11.24)
The Lobito Corridor: Washington’s answer to Belt and Road in Africa (Geopolitical Monitor, 13.11.24)
Zambia’s $10bn copper revival: A long road to recovery (The Africa Report, 11.11.24)
UPCOMING EVENTS
4-6 December – Africa Investment Forum Market Days Rabat, Morocco
11 December - Strengthening U.S.-Zambia Minerals Cooperation: A Fireside Conversation Online
Anglo American Considers Return to Zambia
President Hakainde Hichilema has announced that British mining giant Anglo American is strongly considering a return to Zambia, twenty years after the company stopped operating in the country.
Writing on Facebook, President Hichilema said he had hosted a delegation from Anglo American at State House, including the company’s CEO Duncan Wanblad.
“We are glad to note the renewed interest by Anglo American Corporation to invest in our mining sector after close of 20 years of their exit,” the President wrote.
“The 3 million tons annual copper production target we have set for ourselves will require partnerships with reputable mining companies like Anglo American corporation.”
President Hakainde Hichilema speaking with Anglo American CEO Duncan Wanblad.
Since President Hichilema took office in 2021 there has been an influx of foreign investments into the mining sector. In 2022, Canadian mining company First Quantum Minerals announced plans for a $1.25 billion expansion to its Kansanshi copper mine in North Western Province, as well as $100 million to operationalise its Enterprise nickel project.
These investments were followed by an announcement that the Bill Gates-backed Kobold Metals could spend $2.3 billion to build a new mine at Mingomba, Copperbelt Province, which is thought to be the largest copper discovery in Zambia for more than a century. Then, in October, Barrick Gold declared its decision to invest a further $2 billion at its Lumwana mine facility.
Increasing Zambia’s copper output is a cornerstone of President Hichilema’s plan for economic development, with ambitious targets to expand production to 3 million tons per year in the next decade.
It is currently unclear where Anglo American is likely to resume its operations however, they might partner with the Hichilema administration on one of the 40 government-reserved permits in which the state retains a 30% share in future critical mineral mines. This share, which was announced over the summer, will not affect current mining operations in the country and is intended to increase the benefit of Zambia’s mining sector to ordinary citizens.
Since President Hichilema took office, Zambia’s mining sector has become a highly sought after investment opportunity. His administration abolished the so-called ‘double tax trap’ on mining royalties and has normalised relationships with key players including Vedanta Resources, which soured under the previous administration. The country is now seen as a key player in the shift to green energy, with abundant supplies of copper, cobalt and other critical minerals needed for electric batteries and transmission cables.
Congo Trade Mission Nets US$12.22 Million In Trade
Lusaka, 11th November, 2024 — The Zambia Development Agency (ZDA) has recorded business volumes amounting to US$12.22 Million from the recent Trade Mission to the Democratic Republic of Congo (DRC). The breakdown comprised spot sales amounting to US$23.36 thousand, confirmed orders of US$998.3 thousand and trade leads worth US$11.20 Million.
The orders include the supply of cooking oil, tea, cleaning chemicals, treated poles, cereals, honey, groundnuts, fertilizer, cigarettes, engineering equipment, Personal Protective Equipment (PPEs) and services such as mining consultancy to DRC from 40 Zambian companies that participated in the 2024 Trade Mission.
In addition, the Trade Mission recorded leads for Zambian Companies to partner with DRC companies as a strategy to promote and sustain entry into the DRC market.
Commenting on the results of the Trade Mission, ZDA Director General Albert Halwampa emphasised that the DRC and Hauti Katanga Province, in particular, are an important market for Zambia.
Mr. Halwampa commended businesses that participated in the trade mission and urged them to ensure that they fulfill the orders and pursue leads to convert them into actual transactions and partnerships.
“The DRC continues to be a lucrative and accessible market for Zambian products including supermarket products, mining supplies, assorted agricultural inputs and PPE supplies,” noted Mr. Halwampa.
The objectives of the Trade Mission were to enhance Zambia‘s presence in the DRC; increase the number of companies with an understanding of the size and dynamics of the DRC Market; support companies to showcase their products, maintain the current foothold in the DRC market and establish new and future business relations; It was also an opportunity to undertake B2B meetings between Zambian companies and their Congolese counterparts.
The trade mission was held in Lubumbashi at the Hypnos Mall from the 16th to the 18th of October 2024 in the DRC.
Zambia Investor Briefing: October
OVERVIEW
MINING: First Quantum Minerals (FQM) has confirmed it is engaging in discussions with potential partners regarding its Zambian operations. Meanwhile, President Hakainde Hichilema officially opened the first Zambian Mining and Investment Insaka in Lusaka at the beginning of the month. China Nonferrous Mining Corporation (CNMC) has pledged a $1.3 billion investment in Zambian mining, science, and education technology for the next five years.
TRANSPORT AND TECHNOLOGY: Zambia has become an official member of the Central Corridor Transit Facilitation Agency (CCTTFA). Additionally, after signing a Memorandum of Understanding (MoU) between the Industrial Development Corporation (IDC) and Chinese JIJIA International Company Limited, Zambia will become the first African country to develop the cholera vaccine.
FDI: The US’s Millennium Challenge Corporation (MCC) and Zambia have signed a $491 million Zambia Farm to Market Compact. Meanwhile, the Czech Republic has prioritised Zambia as an investment destination in its list of development cooperation countries. Also this month, Zambia's dollar bonds surged following praise from Morgan Stanley for the country's 2025 spending plan.
WATCH: Zambia is Back has produced a documentary celebrating 60 years of Zambian independence. ‘Zambia: Stronger at 60’ celebrates Zambia’s rich history, vibrant business culture, and promising future. Directed by ZIB’s Choolwe Chibomba, it features a host of guests, including politicians, business leaders, musicians, and football stars.
READ: The latest Forbes ‘African Undiscovered’ edition, ‘Zambia: Driving Change and Connection’, featuring interviews with Minister of Tourism Rodney Malindi Sikumba and Minister of Energy Peter Kapala among others.
COMING UP: KoBold Metals CEO Africa Mfikeyi Makayi will speak at the upcoming Critical Minerals Africa summit in Cape Town from 6-7 November. Makayi will discuss the current project portfolio in Zambia, including the Mingomba Copper Mine, mine development plans and future investment strategy.
A CLOSER LOOK
Mining Developments
First Quantum Minerals (FQM) has confirmed it is engaging in discussions with potential partners regarding its Zambian operations but did not name specific companies involved in the talks. "We're more open to partnerships, and that includes in Zambia, but only if it's in the interest of our Zambian business, the Zambian government and all the stakeholders involved," First Quantum CEO Tristan Pascall said on a conference call with analysts. The announcement follows recent reports that Saudi Arabia's Manara Minerals is close to securing a minority stake in FQM’s Zambian copper and nickel assets in a deal potentially worth $1.5-2 billion.
In other mining news, President Hichilema presided over the official launch ceremony of the Lumwana Mine Super Pit expansion project in Kalumbila District. Barrick Lumwana's extra $500 million investment significantly boosts the country's copper production capabilities. The expanded project is set to create over 3,000 jobs during construction, with an additional 1,500 permanent positions once operational. It includes substantial infrastructure development and the implementation of cutting-edge mining technologies.
The China Nonferrous Mining Corporation (CNMC) has pledged $1.3 billion in investment over the next five years to support its various mining, science, and education technology operations. CNMC group chairperson Xi Zhengping said that by the end of 2025, half of the $1.3 billion investment would have been completed and that the Chambeshi Copper Mines would also receive $450 million. At the end of Xi Zhengping’s three-day visit to Zambia, he told President Hichilema about the plans to reopen shaft 28 at the Luanshya Copper Mine with an investment of $600 million plus a $200 million investment in Sino Metals and a warehouse project.
Earlier this month, President Hakainde Hichilema officiated the inaugural 2024 Zambia Mining and Investment Insaka, which attracted over 2,500 delegates from around the world. The event coincided with the celebration of 100 years of mining in Zambia. During his speech at the Insaka, the President explained, “We need to grow this sector to a level where minor shocks can be absorbed.” He says this is why the government has set a target of three million tonnes of copper production by 2031.
Finally, Zambia unveiled plans to create a mining-funded sovereign wealth fund. The Industrial Development Corporation (IDC), which aims to strengthen Zambia’s industrial base and create jobs, released a statement saying they would establish the sovereign wealth fund next year. The Fund's main goal is to support public finances during financial distress. The IDC said, “the wealth fund will allow us to invest the surplus revenues from our natural resources and other sources, ensuring financial stability.”
Transport and Technology
Zambia has become a full member of the Central Corridor Transit Facilitation Agency (CCTTFA). The Minister of Transport and Logistics, Museba Frank Tayali, signed the agreement during the Interstate Council of Ministers Meeting in Kinshasa, DRC. The Central Corridor is an integrated transport and logistics network which connects member states to the Indian Ocean through the port of Dar es Salaam in Tanzania. Zambia will benefit from greater access to major seaports by joining the Central Corridor, particularly the Port of Dar es Salaam, a significant foreign trade gateway.
In other news, Zambia reached a technological milestone by signing a Memorandum of Understanding (MoU) between the Industrial Development Corporation (IDC) and Chinese owned JIJIA International Company. This MoU will make Zambia the first African country to manufacture the cholera vaccine with the work of the Zambia Pharmaceutical Manufacturing Initiative and partners like Shanghai United Cell Biotechnology Company. Cholera poses a significant threat to the Global South, affecting 1.3 billion people globally and causing 2.86 million cases and 95,000 deaths annually.
Foreign Direct Investment (FDI)
The United States and Zambia have signed a $491.75 million Zambia Farm-to-Market Compact to assist Zambian farmers in accessing regional and global markets. The funds, given under the US MCC, will complement the US government’s investments in the Lobito corridor. The grant, comprised of $458 million from the US government and a $33 million contribution by the Zambian government, was signed as part of ongoing celebrations of Zambia’s 60th anniversary of independence and 60 years of US-Zambian relations.
The Czech Republic says it will invest €3 million per year in various sectors of Zambia from 2024-2030 as Zambia has been prioritised in the European country’s development cooperation list. Cezch Ambassador to Zambia, Pavel Prochazka said the Czech Republic is investing in education, health, nutrition, and many other sectors to promote development. The announcement was made at the Czech National Day in Lusaka, where Mr Prochazka said Zambia had been prioritized because it stood with the Czech people when the former Soviet Union occupied the country.
Zambia’s 2025 budget was announced by Finance Minister Situmbeko Musokotwane at the end of last month. The Budget impressed global markets with Morgan Stanley upgrading its outlook on the nation's bonds due to rising copper revenues and controlled spending. Yields on the nation’s $1.7 billion bonds due in 2033 dropped to 7.86% after the announcement, a record decline.
LONG READS
Zambia Agrees to $1.5 Billion Debt Revamp with Chinese Lenders (Bloomberg, 27.09.24)
Ambitious but Constrained: A “Climate Changed” Budget? (PWC, 30.09.24)
Can AI help Africa close the development gap? (Financial Times, 17.10.24)
Zambia Considering Debt-for-Nature Swap, Finance Minister Says (Bloomberg, 22.10.24)
Zambia: Driving Change and Connection (Forbes Africa)
UPCOMING EVENTS
4-8 November - African Energy Week Cape Town, South Africa
6-7 November - Critical Minerals Africa Summit Cape Town, South Africa
4-6 December - Africa Investment Forum Rabat, Morocco
AfDB loan of USD 8m to help advance 25-MW solar project in Zambia
The African Development Bank Group (AfDB) on Wednesday said it has approved an USD-8-million (EUR 7.4m) concessional loan to back the construction of a 25-MW solar project in Zambia, which has faced rising costs due to the COVID-19 pandemic and other challenges.
The financing comes from the Sustainable Energy Fund for Africa (SEFA), a multi-donor special fund managed by the bank.
The solar project, called Ilute, is being developed in Zambia's Sesheke District by Serengeti Energy Ltd and Western Solar Power Ltd. GreenCo Power Services Ltd has competitively selected the project as a pilot for its energy aggregator model under Zambia’s open grid access framework. GreenCo will act as an intermediary off-taker, buying the plant’s generation under a 25-year power purchase agreement and selling it to the Southern African Power Pool Day-Ahead Market.
"SEFA’s support has been instrumental in bridging the financing gap and will pave the way for future projects that contribute to Southern Africa’s energy transition,” said Daniel Schroth, AfDB director for renewable energy and energy efficiency.
Anton-Louis Olivier, CEO of Serengeti Energy, said SEFA’s support will help move the Ilute project forward. “This loan addresses the financial challenges we’ve faced due to the pandemic and rising costs. The Ilute project is a testament to innovative collaboration and serves as a pioneering model for future renewable energy initiatives in Zambia as well as the wider region,” Olivier added.
This article originally appeared on Renewables Now
Zambia Pursues Deals With Investors to Develop Mining Permits
Zambia plans to develop dozens of mining licenses together with investors to boost copper output in Africa’s second-biggest producer.
The nation has an ambitious plan to more than quadruple production by early next decade. The increase would require companies to spend billions of dollars to transform early stage projects into operating mines.
More than 40 permits reserved by the nation’s Mines Ministry will be transferred to a state company, which will then negotiate agreements with partners, Jito Kayumba, President Hakainde Hichilema’s special assistant for finance and investment, said in an interview. The government firm will hold significant minority but non-operational stakes in the ventures, he said.
“The appetite is illustrated in the numerous unsolicited offers we receive,” Kayumba said by phone.
Subsidiaries of miners First Quantum Minerals Ltd. and Barrick Gold Corp. accounted for about two-thirds of output last year. Those firms are already working on increasing production in the years ahead. Units of Abu Dhabi’s International Resources Holding, Vedanta Resources Ltd. and China Nonferrous Mining Corp. also operate mines in the country.
The state company, which will be owned by Zambia’s Industrial Development Corp., will contribute with the licenses and the results of a government-funded aerial geophysical survey, according to Kayumba.
The nation is also urging investors seeking minority interests in mining assets – such as Saudi Arabia’s Manara Minerals Investment Co. – to team up with an operating partner and the state to develop the available greenfield projects, Kayumba said.
Read the original article on Bloomberg
HH on mining sector reform “I am not allowing this process to happen until we have consensus”
President Hakainde Hichilema has reassured investors that his government will not embark on a controversial reform of Zambia’s mining sector until it has reached a consensus with the country’s mining companies.
In August, the government had announced plans to establish a state-owned firm to control at least 30% of future mines’ production of critical minerals, including copper. The draft legislation would also grant the government advanced mining rights to an area before an exploration licence was granted.
Speaking at the inaugural Zambia Mining and Investment Insaka in Lusaka on Wednesday, President Hichilema said he realised that the policy had spooked investors and he therefore called a meeting of Zambia’s Chamber of Mines, which represents major mining houses, to reassure them that the legislation would not go ahead without their cooperation.
“Invite everybody, even those mine houses that are not represented in the chamber. I said bring them to the table,” Hichilema told delegates at Lusaka’s Mulungushi Conference Centre.
“And I said to the Mines Minister [Paul Kabuswe], to the PS [Permanent Secretary], I am not moving here. I am not allowing this process to happen until we achieve consensus.”
President Hakainde Hichilema: "the government doesn't work in isolation; it must work with investors, its own investors in its own mines".
The comments come following a meeting between the Ministry of Mines and representatives from the Chamber of Mines last month. In a joint statement the chamber and government said they had “developed a roadmap for the resolution of the matter within the shortest period of time.”
President Hichilema’s comments at Zambia’s first ever Mining Insaka reiterate his support for public-private sector cooperation. In his speech he added, “the government doesn’t work in isolation; it must work with investors, its own investors in its own mines. These are our mines you run, Zambian mines. We want them to succeed commercially. Not many countries would do what we did. I think that’s where the value lies.”
The Insaka, which means ‘a place to gather’ in Zambia’s Bemba language, was held to coincide with the 100th anniversary of the first formal mining activity in Zambia.
Writing on Facebook, President Hichilema explained that the event was “a crucial dialogue aimed at shaping the future of the mining sector. It provides a platform or sharing experiences and fostering conversations as equal partners on how to maximize the industry's potential for the benefit of all stakeholders, especially the Zambian people.”
The inaugural Zambia Mining and Investment Insaka coincided with the 100th anniversary of the first formal mining activity in Zambia.
Zambia Investor Briefing: September 2024
OVERVIEW
MINING: Canadian mining firm Ivanhoe Mines has signed a Memorandum of Understanding (MoU) with the Zambian Government for exploration projects. Meanwhile, Barrick Gold plans to complete the feasibility study for its Lumwana mine expansion by year-end, with construction set for 2025.
RAIL: Africa Finance Corporation (AFC) has signed concession agreements with Angola and Zambia for the Zambia Lobito Rail Project. Also this month, President Hakainde Hichilema oversaw the signing of an MoU between China Railway Construction Limited, Zambia, and Tanzania to revitalise the Tanzania-Zambia Railway Authority (TAZARA) railway.
FDI: President Hichilema attended the 2024 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC). His trip focused on addressing Zambia's energy challenges, attracting investment, and strengthening Sino-Zambian relations.
WATCH: Sir Paul Collier, Professor of Economics and Public Policy at Oxford University’s Blavatnik School of Government, spoke to ZIB’s Choolwe Chibomba about investment opportunities in Zambia and what a potential second term for President Hichilema would mean for the Zambian economy. Chibomba also spoke to Renew Capital’s Lucas Robinson about his excitement regarding the vast opportunities available to invest within Zambia and the positive impact which government reforms are having on the investment climate.
COMING UP: ZDA Director General Albert Halwampa will be speaking at the Africa’s Financial Services Investment Conference (AFSIC) 2024 in London 7-9 October 2024. Halwampa will discuss investment opportunities available in Zambia including energy, agriculture, infrastructure development and manufacturing among others.
A CLOSER LOOK
Mining Developments
Canadian mining firm Ivanhoe Mines has signed a Memorandum of Understanding (MoU) with the Zambian Government, securing commitments for information sharing, identification of prospective land, access to geological data (including a new 750,000-km2 airborne geophysical survey), and support for new licence applications. The company has applied for a substantial exploration licence package in Zambia, with decisions expected by year-end. Ivanhoe co-chairperson Robert Friedland is confident in the potential for success for this new opportunity in Zambia: “We have high conviction that new discoveries are waiting to be uncovered”.
In other mining news, Barrick Gold plans to complete the feasibility study for its Lumwana mine expansion by year-end, with construction set for 2025. CEO Mark Bristow states this project will transform Lumwana into a top 25 copper producer and tier-one mine, better equipped for market volatility. The expansion aims to increase average copper production from 120,000 to 240,000 tonnes annually.
Elsewhere, Arc Minerals director and executive chairperson Nick von Schirnding praised President Hichilema on his administration’s achievements in implementing positive change in the mining sector since coming into office, which he described as “very impressive”. He said the UPND Government’s efforts to “turn this ship around” included “getting rid of the bad apples and sorting out historical corruption”. Von Schirnding also discussed Arc Minerals’ copper joint venture with Anglo American in Zambia, which he said remains firmly on track. The article was originally published in Miningmx’s The Mining Yearbook 2024.
Finally, Zambian mining companies have met with the government to discuss proposals that would potentially give the state a larger share of its mineral resources. In a joint press release, the Zambia Chamber of Mines said it was “committed to engaging with Government in finding solutions on policy and regulatory matters”. In a promising step for continued dialogue, the two parties have developed “a roadmap for the resolution of the matter within the shortest period of time” to ensure continued stability in the sector.
Rail Development Projects
Africa Finance Corporation (AFC) has signed concession agreements with Angola and Zambia for the Zambia Lobito Rail Project. The agreement was signed in a ceremony hosted by U.S. Secretary of State Antony J. Blinken during the UN General Assembly, and marks a significant step forward for the railway project. These agreements authorise AFC to finance, construct, own, and operate the railway, which involves the construction of about 800km of rail line connecting the Benguela line in Angola to the existing Zambian rail lines in Chingola. According to AFC president and CEO Samaila Zubairu, “The Zambia Lobito rail project represents a game-changing development for the region, unlocking tremendous potential for trade, industrialisation and socioeconomic growth”.
This follows weeks after the US’s announcement at the end of August of its readiness for “phase three” of its Lobito Corridor project, a rail line connecting the mining regions of northwestern Zambia and southern DRC to the Angolan port of Lobito on the Atlantic coast, and thereby to the global export market. Acting Special Coordinator for the Partnership of Global Infrastructure and Investment Helaina Matza announced, “From day one […] we knew that we wanted to continue the work to the Indian Ocean”, revealing President Biden’s administration’s ambitions to extend the line into East Africa.
The Lobito is not the only significant rail development project in the region. Earlier this month President Hichilema oversaw the signing of an MoU between China Railway Construction Limited, Zambia, and Tanzania to revitalise the Tanzania-Zambia Railway Authority (TAZARA) railway. In February, China proposed to spend $1 billion to rehabilitate the rail line through a public-private partnership model.
Forum on China-Africa Cooperation (FOCAC)
President Hichilema attended the 2024 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC). His trip focused on addressing Zambia's energy challenges, attracting investment, and strengthening Sino-Zambian relations. Beijing saw Hichilema engage in bilateral meetings with Chinese firms. China Non-Ferrous Mining Corporation (CNMC) and China Railway Construction Corporation (CRCC) pledged to expand their Zambian investments.
A pivotal meeting with President Xi Jinping reaffirmed the countries' long-standing cooperation. Discussions centred on boosting economic activity and China's support in energy, infrastructure, and mining sectors. The visit also included discussions with Liu Jiachao, Chinese Minister of International Department, about China's 10-point partnership plan with Africa and continued support for Zambia's infrastructure and debt restructuring.
In some good news for Zambia's energy sector three agreements were signed between ZESCO and Power China, including plans for rooftop solar projects and solar photovoltaic plants at Kariba North and Kafue Gorge Lower. An additional MoU between ZESCO and China Datang Corporation aims to diversify Zambia's energy mix beyond hydroelectricity. In another potential boost for Zambian energy, Hichilema met with LONGi Green Energy Technology Company in Xi’an to discuss solutions for Zambia's energy deficit. The company expressed willingness in collaborating on Zambia's short- and long-term energy mix programme.
LONG READS
The mining disruptors that could rock the industry (Investors’ Chronicle, 28.08.24)
China’s Xi Jinping courts African leaders to ward off geopolitical rivals (Financial Times, 04.09.24)
Investors and entrepreneurs collaborate in Zambia for social impact (Forbes, 18.09.24)
Samual Munzele Maimbo: SADC’s candidate for African Development Bank presidency (The Africa Report, 25.09.24)
The Mining Yearbook 2024 (Miningmx)
UPCOMING EVENTS
7-9 October - AFSIC Investing in Africa Conference and Expo London, UK
7-10 October - Green Energy Africa Summit Cape Town, South Africa
7-11 October - Zambia Mining and Investment Insaka Lusaka, Zambia
9-10 October - Zambia Impact Investment Summit Lusaka, Zambia
14-15 October - Brazil Africa Forum Sao Paulo, Brazil
22-24 October - Africa PPP: Infrastructure and Investment Summit Casablanca, Morocco
29-30 October - FT Africa Summit London, UK
Jubilee Metals expands copper operations in Zambia with Project G acquisition
Jubilee Metals Group plc, a diversified metals producer with operations in Zambia and South Africa, has provided a further update on the roll-out of its Copper Strategy in Zambia which is centred around achieving an initial production capacity target of 25 000 tonnes of copper per year.
The Company has successfully concluded its due diligence of Project G, an open pit copper mining operation in Zambia and has elected to acquire a majority interest in Project G under revised terms increasing the Company’s holding to 65% from 51%, as previously announced on 21 August 2024. Project G marks the second open-pit copper operation acquired in Zambia following the implementation of Project Munkoyo.
In addition, the Company is pleased to announce that it has increased the allocation of power under the recently announced (23 September 2024) private power purchase agreement to secure an additional 2MW of power in order to ensure that all of the Zambian operations are fully supplied under the LHPC agreement. The increased power allocation allows the Roan Concentrator to operate at full capacity in respect of its newly commissioned front-end module and its existing milling and floatation plant. The Company’s Zambian operations have now fully transitioned its power requirements onto renewable energy sources.
Additional $500 million to be invested into Lumwana Mine
President Hakainde Hichilema officiated the groundbreaking ceremony for the Lumwana Mine Super Pit in Kalumbila District, marking a pivotal milestone in Zambia’s mining sector. The event, held on a one-day working visit to the North-Western Province, signals a new era for the country, with significant investments poised to strengthen Zambia’s standing in the global copper industry.
The expansion of the Lumwana Mine, spearheaded by Barrick Lumwana, will see an estimated $500 million USD invested in infrastructure development, operational expansion, and advanced mining technologies. This substantial investment is expected to create over 3,000 direct jobs during the construction phase, with an additional 1,500 long-term jobs upon completion.
“This is a momentous occasion that reflects our ongoing progress in building a robust, globally competitive mining industry,” President Hichilema stated. “Copper is rapidly becoming a critical mineral on the world stage, and this project ensures that Zambia remains a key player.”
President Hichilema extended his gratitude to Barrick Lumwana for their dedication to the project and their commitment to collaboration, ensuring the success and impact of the Super Pit expansion.
During his visit, the President also engaged with traditional leaders and addressed a public rally at Manyama in Kalumbila District, where he interacted with local residents.
President Hichilema departed from Solwezi Airport at 17:40 hours, seen off by North-Western Province Minister Robert Lihefu, along with senior government and UPND officials. His visit underscores the government’s commitment to fostering development and economic growth in the region through strategic partnerships in the mining sector.
This article originally appeared on Lusaka Times
Zambia Bonds Rally as Morgan Stanley Praises Budget Restraint
Zambia’s dollar bonds climbed after its 2025 spending plan won praise from Morgan Stanley even as it drew concern from locals battling with the impact of the nation’s worst drought in a century.
The advance on its $1.7 billion in notes due 2033 sent yields tumbling by the most on record, reaching 7.86%. They’ve dropped more than 30 basis points since Finance Minister Situmbeko Musokotwane announced the budget on Sept. 27, reversing a weakening trend that started after the government completed a debt restructuring in June.
The bonds have performed so well that Secretary to the Treasury Felix Nkulukusa on Monday said the window may be closing to exchange them in a potential debt-for-nature swap.
Neville Mandimika, emerging-markets strategist at Morgan Stanley, upgraded his view on Zambia’s bonds to “like” after the spending plan showed a strong fiscal performance, with revenues exceeding expectations and expenditures controlled in the first half of 2024.
The outlook showed room for further consolidation next year, which will be helped by rising output and prices for copper, Zambia’s biggest export, Mandimika said.
Still, Musokotwane’s plan to trim 2025’s fiscal deficit to 3.1% from 6.4% estimated for this year means tighter spending controls.
Read the original piece on Bloomberg here.
BackChat Season 3 Episode 4: Lucas Robinson
Our latest episode of BackChat features Lucas Robinson of Renew Capital.
With a focus on technology, Lucas speaks openly about his excitement regarding the vast opportunities available to invest within Zambia and the positive impact which government reforms are having on the investment climate.
‘You ain’t seen nothing yet’ - Oxford Professor Praises Future of Zambia’s Economy
Oxford University Professor of Economics and Public Policy Paul Collier has praised President Hakainde Hichilema’s record in government, arguing that he inherited a difficult position and has now positioned the country for future economic growth.
Speaking to Zambia Is Back’s ‘BackChat’ program, Professor Collier said, “The change that President Hichilema will achieve in a second term will set a role model for the rest of southern Africa. Reforms will extend beyond minerals - to agriculture and new businesses.”
The British Academic explained that Zambia’s economic history demonstrates the urgent need for President Hichilema’s reforming agenda. Citing Chile as an example of a fellow copper exporter, “neck and neck” with Zambia 50 years ago, Collier highlights the different trajectories of the two nations - Chile’s GDP Per Capita is now over 15 times Zambia’s.
Professor Collier attributes the two countries’ divergent economic fortunes to poor management under a corrupt political class in Lusaka, where political power alternated between the two largest ethnic-based parties. Meanwhile, he says, mining and agriculture were underdeveloped.
Professor Collier said he was particularly impressed by President Hichilema’s commitment to political devolution, saying it “woke me up” to Hichilema when he was still an opposition candidate. The President’s National Decentralization Policy and Zambia Devolution Support Program (ZDSP), launched in May of last year, has now kicked off what Collier calls ‘long overdue’ decentralisation.
The move to devolution signalled the government’s commitment to bringing government services closer to the people and promoting accountability and transparency among local authorities and regions. Ultimately, the aim was to reduce corruption and boost international investment.
President Hichilema greets the local community in Zambezi District, NW Province
Asked if he thought the country was in a stronger position now than under the previous government, Collier responded that whilst Zambia is still in a difficult position, it is “through no fault of President Hichilema.”
The ongoing droughts are a major setback for Zambia, just as the government nears the end of a slow and painful debt-restructuring process after it became Africa’s first pandemic-era sovereign defaulter in 2020. This “double whammy”, as Collier terms it, has made life very difficult for Zambians. Staple corn harvests fell by 54% to a 16-year low, while hydropower generation - which accounts for about 85% of Zambia’s electricity supply- has plunged, leading to rolling blackouts lasting at least 12 hours daily.
Collier contends that the situation would be a lot worse if President Hichilema were not in power. Regarding Hichilema’s ability to secure international support, Collier said, “It’s the very top of international agencies, the very top of America and the very top of Britain, which shows the level of authority and respect that President Hichilema commands in international circles”. President Hichilema has also taken significant action to tackle the energy crisis, accelerating private investment in new energy, expanding the use of solar panels, and increasing the grid supply through new energy providers.
President Hichilema has expanded the use of solar panel within Zambia to help tackle the current energy crisis.
There are significant signs that Zambia is tempting investment back in. In 2023, the Zambia Development Agency (ZDA) reported pledged investments totalling US$39.97 billion, a significant increase from US$8.11 billion in 2022 and US$3.3 billion in 2021. The number of committed jobs also rose sharply from 24,585 in 2021 to 160,280 in 2023.
Last week, Moody’s Ratings upgraded Zambia’s long-term foreign-currency issuer rating to Caa2 from Ca, which is a step in the right direction. Hichilema’s government’s strong performance under its IMF program “anchors the agency’s expectations of continuing gradual institutional improvement,”said Moody’s.
Looking ahead, Professor Collier believes there are two keys to growth and economic development and that President Hichilema’s business acumen and economic reforms are essential to both.
The first key is finding venture capital to catalyse new businesses and sectors; in Collier's words, “It’s not pick a sector, it's pick a process”. The process of experimentation, with risk finance investing in small firms led by young Zambian entrepreneurs, is essential to diversifying the economy and expanding Zambia’s middle class.
The formulation of a new startup bill and community-allocated Constituency Development Funds (CDF) show that Zambia is setting the stage for redefining its economy, focusing on innovation and entrepreneurship, and making capital access easier.
The second key to development according to Collier, is a “gradual struggle to win the battle for productivity across the economy.” In particular, the development expert believes that mining on the Copperbelt, agriculture and Small and Medium-sized Enterprises (SMEs) can all flourish and become more productive in Zambia. “This is the way to make sustainable improvements,” he argues.
Professor Collier says agriculture is e key to developing Zambia's economy
All in all, Professor Collier firmly believes that President Hichilema is in a position to win the next election and that by the end of the extra seven years, “people in Zambia will be materially more prosperous because they will be more productive.”
You can watch the full interview with Professor Collier on the latest episode of BackChat.
BackChat Season 3 Episode 3: Professor Paul Collier
This week Choolwe Chibomba speaks with Professor Paul Collier of the Blavatnik School of Government at the University of Oxford. He specialises in the political, economic and developmental predicaments of low-income countries.
In this episode, Professor Collier speaks on topics including the work that President Hichilema is putting in to resolve current issues within the country, investment opportunities outside of mining, and what a potential second term for President Hichilema would mean for the Zambian economy.
All systems go for Arc’s Zambia copper JV with Anglo
Base metals exploration development company Arc Minerals says its copper JV with Anglo American in Zambia remains firmly on track.
Anglo in May rebuffed an all-share takeover bid from BHP which was focused on its copper assets – and Anglo’s new strategy, unveiled in the heat of that battle, is also drilling down on the red metal.
“It is all about copper, and that is frankly for Anglo and all other majors the No. 1 priority, at least the ones exposed to base metals,” Nick von Schirnding, director and executive chairman of Arc Minerals, said in an interview.
“I think it’s the most exciting prospective copper tenement in the world, certainly in Africa.”
Von Schirnding said the $90m project in the Dome region of the Zambian Copperbelt was fully funded and that drilling was set to resume in June. About $75m of that is “going into the ground” to support exploration.
“We started drilling late last year but the rains caught up with us. We drilled one deep stratigraphic hole down to 950m and that showed all kinds of interesting things including not only copper but also nickel mineralisation,” Von Schirnding said.
“That will help to better inform us about the upcoming drilling campaign. That will be very significant and probably last until late November/early December, depending on when the rains kick in.”
Arc’s tenements span 870km2 and are near First Quantum Minerals’ Sentinel and Kansanshi copper mines and Barrick’s Lumwana mine.
Industrial-scale copper mining started in Zambia almost a century ago, but there is still a lot of unexplored ground there. Exploration activities and capital investment were stymied after the Zambian government nationalised the industry – including Anglo’s assets at the time – in 1969.
The subsequent re-privatisation set the industry on a roller-coaster ride through successive Zambian governments, some of which were far less investor-friendly than others.
But Hakainde Hichilema, who won the 2021 presidential election, has worked hard to woo investors and create an environment more conducive to mining, which remains the lifeblood of the land-locked Southern African country’s economy.
“If you look at what the new administration in Zambia has done to turn this ship around, it’s been very impressive. I have met several senior people in the president’s office who have been tasked with implementing the changes that he wants to implement and that includes getting rid of the bad apples and sorting out historic corruption,” Von Schirnding said.
He pointedly noted that this was “easier said than done, as we see with President Cyril Ramaphosa in South Africa who had dealt with similar issues”.
Von Schirnding also said the Dome region in Zambia had reasonably good infrastructure, given its proximity to existing mines.
“There is no shortage of water and there is power up there that we can access. The road network is mixed but we have graded roads over the period that we have been up there, and the government has said that they are going to put more infrastructure in that north west part of Zambia, and that all can be done,” he said.
“And if you look at what First Quantum has done with their investments around their mines, tarred roads and things like that, that is what mining investment can do to uplift what is a historically poor region of Zambia.”
One open question is funding for the project when it moves beyond the exploration and development stage.
Concerns have been raised about the state of Anglo’s balance sheet and its ability to bring its copper assets – which are mostly in Latin America – to fruition. That is one of the reasons why at least some of Anglo’s shareholders were willing to entertain talks with BHP.
But Anglo plans to sell off its steel-making coal assets in Australia and diamond giant De Beers, and is slowing capital outlay on its fertiliser project in the UK. And it is directing its capital flow to copper. Some of that will conceivably trickle to a country where it was mining copper decades ago.
Von Schirnding won’t be drawn on Anglo’s recent restructuring plans, unveiled in May, in which the group intends to sell its 85% stake in De Beers, unbundle a 79.2% stake in Anglo American Platinum and sell its metallurgical coal assets in Australia.
But he was once high up in Anglo’s pecking order as head of investor relations and corporate affairs. That was in 1999 when the group listed its shares in London, a controversial development at the time because it signalled Anglo’s intention to unmoor itself from its South African base. He ended a 20-year association with Anglo in 2010 before embarking on a varied journey through the Asian, African and South American mining industries. He took his seat at Arc in 2017.
Von Schirnding remains bullish about the company’s prospects. “The excitement starts now,” he said in an October conference call to investors. The deal with Anglo was nothing short of the best exploration earn-in ever drafted, he added. Since then, investors seemed to have cooled on its prospects. At the time of writing, shares in the company had halved.
This article originally appeared on MiningMX
Zambia Investor Briefing: August 2024
OVERVIEW
The Zambian Development Agency (ZDA) recorded an impressive $8.9 billion in actualised investments between 2021-2024. In a statement the ZDA said “The USD$8.9 billion was recorded from 440 companies out of the 1048 companies registered between 2021 and 2024. Data from the 608 companies is still being awaited due to slow responses, once received the final actualised amount will be communicated accordingly”.
ZDA Director General Albert Halwampa will be speaking at the Africa’s Financial Services Investment Conference (AFSIC) 2024 in London 7-9 October. Halwampa will discuss investment opportunities available in Zambia including energy, agriculture, infrastructure development and manufacturing among others. Halwampa wrote in African Business that “Zambia is back in business” with $40 billion in investment committed in 2023 – up from $8.11 billion in 2022 and $3.3 billion in 2021.
President Hakainde Hichilema presided over the revival of Konkola Copper Mines (KCM) where he praised Vedanta Resources, KCM’s operator, for working with the government to get the mine back into operation.
Mopani Copper Mines successfully produced its first 200 tonnes of copper anodes since new equity partner, International Resources Holdings (IRH), took a 51% stake following its $1.1 billion capital injection in April.
Zambia reopened its border with neighbouring DRC, reviving the copper trade route and allowing goods to once more flow between the two nations. Shortly thereafter, the first shipment of US copper from mines in the DRC were loaded for transportation along the Lobito corridor, a key export route connecting mines in both Congo and Zambia to Lobito Port in Angola.
Sir Paul Collier, Professor of Economics and Public Policy at Oxford University’s Blavatnik School of Government, has praised President Hakainde Hichilema for reviving Zambia’s economic prospects. Writing in the Financial Times, Prof. Collier said the President had “built a team of competent ministers and advisers and crafted a programme of deep economic reform”.
A CLOSER LOOK
Mining Developments
President Hakainde Hichilema presided over the revival of Konkola Copper Mines (KCM) which he said will create more jobs for Zambians and increase tax revenues. The President praised Vedanta Resources, KCM’s new operator, for working with the government to get the mine back into operation. This follows Vedanta’s announcement in July that the company had arranged the financing of nearly $250 million needed to start paying off KCM’s creditors after it had secured approval from the High Court to take back control of the asset.
Speaking at Chililabombwe on the Copperbelt at the relaunch, Hichilema said “This mine will move two or three hundred thousand metric tonnes so it can contribute towards three million tonnes of copper – our vision”. The President also reiterated the governments “unwavering commitment […] to ensuring that the mining industry remains a cornerstone of Zambia’s economic development”.
In other mining news, Mopani Copper Mines successfully produced its first 200 tonnes of copper anodes since new equity partner, International Resources Holdings (IRH), took a 51% stake following its $1.1 billion capital injection in March. Mopani CEO Charles Sakanya said full operations at the mines are expected start in October of this year.
Elsewhere, Sinomine Resource Group, a Chinese-based mining services group, has invested $600 million in the Kitumba mine in Mumbwa District. The mine was opened last week by President Hichilema who indicated that this success continues to demonstrate a new era of Zambian mining success under the UPND government.
Finally, Zambia’s Ministry of Mines and Mineral Development signed a Memorandum of Understanding (MoU) with Ivanhoe Mines, which aims to further develop Zambia’s mining sector. At the signing ceremony Minister for Mines Paul Kabuswe spoke of Ivanhoe’s impressive track record when it comes to investment across the continent.
Energy and Technology
President Hichilema opened the inaugural Energy Forum for Africa conference at Mulungushi International Conference Centre in Lusaka, for which the theme was ‘Investment Opportunities in the Energy Sector in Zambia and Africa’. In his address, the President reiterated the “various regulatory and legal reforms we’ve undertaken to attract investment in the energy sector”. One month previously, Zambia officially opened up its electricity market to private industry.
Science and Technology Minister Felix Mutati announced Zambia has completed the construction of a ground receiving station which will pave the way for the launch of the country’s first satellite. The government has invested over $14 million in building the ground receiving station, with future plans to launch an earth-observation satellite to help address the challenges brought about by climate change in agriculture, land use and energy.
The ongoing drought is continuing to have a seriously adverse effect on the country’s energy sector, which is highly reliant on hydroelectric power. As part of efforts to diversify and stabilise Zambia’s energy supply for the future, President Hichilema this month announced the start of construction at Maamba Energy’s new 300MW geothermal plant in Southern Province. The facility is expected to come online in 2026.
LONG READS
Economic reforms are tempting finance back to Ethiopia and Zambia (Financial Times, 15.08.24)
Zambia is back in business (African Business, 19.08.24)
The US-backed railway sparking a battle for African copper (Financial Times, 21.08.24)
Scramble for critical minerals spurs and African rail revival (Bloomberg, 25.08.24)
UPCOMING EVENTS
Nairobi, Kenya 4-6 September
London, UK 26 September
Zambia Impact Investment Summit
Lusaka, Zambia 9-10 October
BackChat Season 3 Episode 2: Mafipe Chunga
Tune in to Mafipe Chunga, Managing Director of MCA Zambia and Co-Founder of OneSquareK, a modern, youth focussed housing development. This week Choolwe discusses the country's investment climate, Mafipe's current work and investments as well as President Hichilema's role in attracting investment into Zambia. #ZambiaisBack #Zambia #InvestinZambia #Investing