Zambia Investor Briefing December 2022
ZAMBIA INVESTOR BRIEFING
December 2022
OVERVIEW
President Hakainde Hichilema travelled to the US to take part in the US-Africa Leaders Summit, hosted by US President Joe Biden in Washington, D.C. The summit was attended by almost all African heads of state, in addition to business leaders and investors from the continent. While there, President Hichilema participated in the inaugural US-Africa Business Forum, co-hosted by the US Department of Commerce, the US Chamber of Commerce and the Corporate Council on Africa, in partnership with the US government’s Prosper Africa initiative.
A US-based company, KoBold Metals, will invest USD 150 million in Zambia’s Mingomba mine project. The deal was announced by President Hichilema at the recent US-Africa Leaders Summit. The California company, which is backed by tech tycoon Bill Gates, said the Mingomba project’s potential to become “one of the world’s top-tier mines”, was why they were so attracted to the deal. KoBold Metals are buying into the joint venture with Australian firm EMR Capital and ZCCM-IH.
The DR Congo and Zambia have signed a Memorandum of Understanding (MoU) with the US. The agreement promises US support to both the DR Congo and Zambia in developing an electric vehicle value chain. Present at the signing, which took place on the first day of the US-Africa Leaders Summit, were US Secretary of State Anthony Blinken, DR Congo Vice Prime Minister and Foreign Minister Christophe Lutundula and Zambian Foreign Minister Stanley Kakubo.
Canadian mining company First Quantum Minerals (FQM) are to pay the state-backed ZCCM-IH in revenue royalties, rather than dividends, following negotiations between parties.
President Hichilema opened a new one-stop-border-post at Mchinji-Mwami with his Malawian counterpart Lazarus Chakwera. The border post is of “vital importance to the economies of Zambia and Malawi”, the president said.
Radisson Hotel Group has opened its first Zambian resort. Found on the banks of the Zambezi River and just 4km from Victoria Falls, Radisson Blu Mosi-oa-Tunya Livingstone Resort is the Group’s first safari resort in Africa.
Mining Developments
President Hichilema travelled to Washington, D.C., to attend the US-Africa Leaders Summit, which took place over 3 days between 13-15 December. The summit aimed to strengthen ties between the world’s largest economy and its African partners.
While there, the president announced a USD 150 million investment in the Mingomba mine, thought to be the world’s highest-grade undeveloped large copper deposit. The pledge came from KoBold Metals, a California-based artificial intelligence firm backed by Bill Gates and EMR Capital.
EMR Capital executive chairman Owen Hegarty told reporters that KoBold Metal will take a 52% stake in the Mingomba project, while the other joint venture partners, EMR Capital and Zambia's state-backed ZCCM-IH, will own 28% and 20% respectively.
Elsewhere, Canadian mining company FQM has agreed to convert dividends from its copper mine at Kansanshi to a revenue royalty. According to the agreement, ZCCM-IH will receive 3.1% in a revenue royalty from the mine, which is forecast to produce between 140,000 and 150,000 tons for the financial year ending December 31.
According to economist Oliver Saasa, the deal will allow ZCCM-IH to extract more value from the Kansanshi mine than would have previously been the case with the divided model. “The overall average revenue from the royalty model that ZCCM-IH has opted for is expected not only to be higher, but also more predictable and consistent”, he told Mining for Zambia. “If you ask me, this could be a model for all mining business[es] in Zambia to consider”.
Debt Management
US Treasury Secretary Janet Yellen held a closed-door meeting with President Hichilema during his recent trip to the US. The pair discussed “the need to address debt sustainability and the imperative to conclude a debt treatment for Zambia”, according to Yellen. She added that it was important for Zambia’s creditors to conclude an equitable debt restructuring deal as quickly as possible to lend credibility to the G20 Common Framework for poor country debt relief.
Yellen also announced plans to visit the continent from 17-28 January, taking in Zambia, South Africa and Senegal. US President Joe Biden too said he hoped to visit next year, which would be the first visit to sub-Saharan Africa by a sitting US president since Barak Obama’s in 2015.
President Hichilema held further meetings with World Bank officials in Washington, D.C., accompanied by Minister of Foreign Affairs Stanley Kakubo, Commerce Minister Chipoka Mulenga and Mines Minister Paul Kabuswe.
Other sideline discussions at the summit yielded a promise from the Millennium Challenge Corporation, an independent US government foreign aid agency, that a second so-called compact aid package would be signed with Zambia in 2023, targeted largely at the agriculture sector. The first of such packages was secured in 2018, with USD 355 million aimed at boosting the country’s supply of drinking water.
Regional Partners
The New Dawn government has agreed to further help the US secure batteries for electric vehicles. An MoU was signed between the US, Zambia and the DR Congo, aiming to develop an industry to process strategic raw materials like cobalt, lithium, nickel and manganese in the Copper Belt.
Closer to home, President Hichilema launched the Mchinji-Mwami one-stop border post with his Malawian counterpart, Lazarus Chakwera. “We are one people and we need to invest jointly to grow the economies of our two countries”, he remarked at the ceremony.
LATEST TRENDS
GDP
Inflation
Currency
1 USD = 17.86 ZMW 30 day average = 17.220 Volatility (last 30 days) = 0.42%
OTHER NEWS
IMF to assess Zambia in spring, urges debt deal with creditors, 09.12.22, Reuters
Government calls on proper management of mineral resources in Mkushi, 12.12.22, Lusaka Times
ZDA calls for increased trade and investment between Zambia and USA, 12.12.22, ZDA
Beeline Telecom to launch operations in January 2023, 13.12.22, Lusaka Times
Debt defaulter Zambia seeks to offload costly presidential Gulfstream jet, 15.12.22, Bloomberg
Government launches interim guidelines on carbon market and trading, 19.12.22, Lusaka Times
Government implores stakeholders to invest in electricity generation, 19.12.22, Lusaka Times
HH to hold end of year press conference, 20.12.22, Diggers
UPCOMING EVENTS
25.01.23 - 29.01.23
International Kingdom Business Conference
Livingstone, Zambia
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