Zambia Investor Briefing: July 2024
OVERVIEW
Vedanta Resources is looking for a partner to boost output at its Zambian copper assets. This follows Vedanta’s announcement earlier in the month that it had arranged the financing of nearly $250 million needed to start paying off Konkola Copper Mines’ creditors after it had secured approval from the High Court to take back control of the asset.
State mining unit ZCCM Investment Holdings has revealed China’s JCHX Mining is planning on investing $300 million into Lubambe Copper Mine, having purchased an 80% stake in the asset from EMR Capital.
China’s Huawei Technologies and the Zambian Government have signed an MoU for the construction of 100 ‘smart villages’, as announced at the launch of the country’s first smart village, Muchila, in Namwala District.
‘Tourism Doing Business – Investing in Zambia’, a recently-published report by UN Tourism, highlights key sectors for investment relating to the country’s tourism industry.
Global Investor CEO Frank Holmes has praised President Hichilema’s attitude towards attracting investment while in government. Writing for Forbes, Holmes highlights how the President’s “pro-business approach, coupled with his commitment to economic reforms and anti-corruption measures, has steadily made Zambia an attractive destination for investors. His administration’s efforts to stabilize the economy, enhance governance and foster a conducive business environment are particularly noteworthy.”
A CLOSER LOOK
Mining Developments
Indian billionaire Anil Agarwal’s Vedanta Resources is looking for a partner to boost output at its Zambian copper assets. The company issued a call for expressions of interest to carry out exploration, development and production as part of its $1 billion investment plan at Konkola Copper Mines (KCM). This follows Vedanta’s announcement earlier in the month that it 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.
Talks to sell a stake in the mine – which holds one of the richest copper deposits in the world – to the UAE’s International Resources Holding (IRH) collapsed after the parties failed to agree on KCM’s value. Reuters reported in April that IRH had put in an offer for a 51% stake for over $1 billion.
Elsewhere, state mining unit ZCCM Investment Holdings has revealed China’s JCHX Mining is planning on investing $300 million into Lubambe Copper Mines, having purchased an 80% stake in the asset from EMR Capital. JCHX plans to “inject new vitality” into the mine, including sinking a new shaft.
These developments come at a time when the country’s copper production is expected to grow more than 40% to 1 million tons between 2025 and 2027, as announced by the Finance Ministry in its medium-term budget plan.
In other mining news, First Quantum Minerals (FQM) has commenced operations at its Enterprise Mine. It is on trajectory to become the country’s largest nickel mine. FQM expects Enterprise will rank in the top ten globally for nickel production when it reaches full strength, boosting Zambia’s bid to become a key supplier of battery metals. According to FQM’s CEO Tristan Pascall, “We had another solid quarter in Zambia and with the work achieved to date, both Kansanshi and Sentinel [FQM’s Zambian copper assets] are well set up for the remainder of the year”.
Energy and Technology
Zambia is to build its second-ever coal-fired power plant after approval was granted by the Energy Regulation Board earlier this month. The 300mw facility will be based in the south of the country. Its construction is to be led by Maamba Collieries Ltd, which has secured $300 million in financing for the project. Work is expected to commence in August of this year and be completed by July 2026. The project aligns 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.
Elsewhere, China’s Huwai Technologies and the Zambian Government have signed an MoU for the construction of 100 smart villages, as announced at the launch of the country’s first Smart Village, Muchila, in Namwala District. Muchila now has a Rural-Star communications tower providing coverage for the village, while Namwala District has a mini solar grid powering a school and clinic.
President Hichilema, who attended Muchila’s launch ceremony as the guest of honour, said in a statement posted to his Facebook page, “This initiative reflects our government’s strategic approach to forming collaborative partnerships, aiming to achieve a digitally inclusive society”. He added, “Through this project and many others, we aim to foster a culture of digital innovation and entrepreneurship, driving economic growth and jobs created at the grassroots level”.
Tourism
‘Tourism Doing Business – Investing in Zambia’, a recently-published report by UN Tourism, highlights key sectors for investment relating to the country’s tourism industry. Executive Director of UN Tourism Natalia Bayona describes the publication as a “catalyst for Zambia’s future growth” which “provides a roadmap for sustainable tourism development, fostering not only prosperity but also job creation, community empowerment, and SME expansion”.
The publication focuses especially on economic growth and sustainable development. It lists the country’s abundant natural resources, cultural diversity, strategic location, business-friendly environment and attractive investment incentives as among the key reasons to invest in Zambia. In his foreword to the report, President Hichilema writes, “Zambia is one of the most peaceful countries on the continent with warm and friendly people ready to welcome people of any race, religious belief, and background to invest in the sector”.
Meanwhile, the Zambia Development Agency (ZDA) Director General Albert Halwampa addressed delegates at the UN Tourism Regional Commission for Africa and the UN Tourism Regional Conference on Brand Africa in Livingstone. He highlighted the numerous investment opportunities available and the status of Zambia as a competitive tourism investment destination. Halwampa also stressed how the ZDA “facilitates both fiscal and non-fiscal incentives to investors including those investing in the tourism sector”.
Foreign Direct Investment (FDI)
The ZDA has signed a Memorandum of Understanding (MoU) with the Association of Chinese Corporations in Zambia (ACCZ) to enhance investment and trade relations between the two countries. This agreement, signed during the inaugural ACCZ Economic and Investment Summit in Lusaka on 12 July, aims to establish long-term investment projects that will contribute to the economic development of both nations.
ZDA Director-General, Albert Halwampa, highlighted the significance of this partnership: “The symposium indicates investor confidence in Zambia, driven by good leadership and stable economic policies.” The MoU encompasses various areas of mutual interest, including trade and investment, infrastructural development, agriculture, mining, and technological advancement.
Long Reads
Top mining companies commit billions to Zambia’s copper industry (Forbes, 02.07.24)
Helen Lubamba, Stanbic Bank Zambia: Critical moment (CNBC Africa, 09.07.24)
AI needs copper. It just helped to find millions of tons of it (The New York Times, 11.07.24)
Africa’s surprising new age of rail (The Economist, 18.07.24)
UPCOMING EVENTS
4-6 September - Africa FinTech Summit, Nairobi, Kenya