Copper-rich Zambia is a breath of fresh air for foreign investors

By Ed Stoddard

A recurring theme at the Investing in African Mining Indaba is the rise and fall of countries as investment destinations. The annual conference is, in some ways, like a beauty contest for capital. At this year’s Indaba, Zambia emerged as one of the winners.

Zambian President Hakainde Hichilema, a former businessperson, has been attempting to woo foreign investors since he came to power in August 2021. And they have certainly been charmed.

“Zambia is looking very good. President Hichilema is a professional; he’s doing exactly the right things. His focus is strongly focused on commercial realities and [he] is just a breath of fresh air,” Sibanye-Stillwater CEO Neal Froneman told Business Maverick in an interview.

“We like Zambia as a destination. There are some great copper assets in Zambia,” Froneman said.

Froneman would not specifically say if Sibanye was planning on acquiring a copper asset in Zambia, but the company is clearly taking a hard look there.

Froneman, who has transformed Sibanye from a Gold Fields’ spin-off focused on conventional gold mines in South Africa into a diversified metals producer, is a deal-maker of note.

Copper fits perfectly with its strategy of moving into the “green” or “critical” metals seen as vital to the global clean energy transition.

“Some of the assets are deep and there is not a lot of companies with deep underground mining experience. You have projects in liquidation and companies that hold large debt positions. So we have a skill set required to unlock value from those assets,” Froneman said.

On the catwalk

Other investors and executives also applauded Zambia’s performance on the catwalk.

“The people there really want mining, the government is quite accessible, there’s no BEE, the legislation is clear, and they have a proper mining cadastre,” said Peter Major, director of mining at Modern Corporate Solutions. Major is in the process of raising funds for a zinc project in central Zambia.

Zambia’s mining cadastre, like Botswana’s, is impressive, transparently providing investors and the public with information about which companies have mining rights and permits, and where.

It’s what a cadastre is supposed to do, and South Africa’s lack of one remains a major deterrent to investment in its mining sector. But President Cyril Ramaphosa did tell the Indaba on Tuesday, 7 February, that South Africa was on track to procure one.

Marna Cloete, president at Ivanhoe Mines, also said Zambia’s star was rising. Ivanhoe does not have assets there, but it operates across the border in the DRC, which is also rich in copper.

“The president [of Zambia] comes from a business background… He’s actively pursuing investment. He’s a very dynamic person. We do engage with Zambia on infrastructure because we share a border and we have seen vast improvement in terms of engagement with the Zambian government,” she said.

These include negotiations for a border crossing to facilitate the movement of Ivanhoe’s products.

Valuable commodities

At past Indabas, Zambia’s light has shone less brightly. A few years ago, there were uncertainties about taxes and concerns about resource nationalism. Under Edgar Lungu, Hichilema’s predecessor, corruption was widely perceived to have flourished and the mining sector was a frequent target of political wrath.

And, of course, decades ago there was the whole debacle around nationalisation under Kenneth Kuanda.

Zambia is studded with copper and it also has cobalt, a crucial battery metal. It also has gold, nickel and manganese among other valuable commodities.

The interest in Zambia displayed by players in the mining sector this time round builds on Hichilema’s performance at the Indaba in May of last year, when copper producer First Quantum Minerals announced the largest investment in Zambia in a decade: $1.35-billion in two new projects.

Several attendees at this year’s Indaba spoke glowingly about how Zambia impressed in May of last year, an indication that the narrative that got rolling then remains in play. In South Africa, the “Ramaphoria” that was still in the air at the 2018 Indaba quickly faded.

Land-locked and tropical, it faces serious challenges to development. But the current perception is that Hichilema is determined to unlock the country’s resource value through foreign investment.

If an executive such as Froneman is looking, you are probably doing something right on that front.

This is an article taken from the Daily Maverick. All rights to this article and its images belong to the Daily Maverick.