Zambia Investor Briefing: June 2024
Do you have a news story you would like included in the next briefing? Email us
OVERVIEW
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, is reportedly in talks to buy a stake in Konkola Copper Mines (KCM). According to Chris Griffith, CEO for Base Metals at Metals of KCM’s current owner Vedanta Resources, the company wants to retain majority shareholding in KCM but could sell up to a 30% stake.
Officials from California-based startup KoBold Metals met with President Hichilema to discuss the development of the Mingomba project, formerly known as Konkola West. KoBold aims to produce more than 300,000 metric tonnes of copper annually at the mine, with shaft sinking set to begin in 2026.
Google has entered the Zambian market to revolutionise the Information and Communication Technology (ICT) sector following incentives given by the government. Through its subsidiary Google Cloud, the American technology giant has signed a Memorandum of Understanding (MoU) with the Ministry of Technology and Science which will see the construction of a Center of Excellence in digital transformation, innovation, offering skills development and knowledge sharing.
President Hichilema embarked on a working visit to the UK where he met with King Charles III, government officials, investors and members of the diaspora. During the visit the President received an honorary degree from Heriot Watt University in recognition of his leadership in transforming education in the southern African country.
In welcome news for Zambia’s debt restructuring efforts, international bondholders met early this month to approve the exchange of $3 billion of existing Eurobonds. During his UK trip, President Hichilema met with Alex Garrard of Amia Capital, one of the representatives of the Eurobond holders. There, the President reiterated his commitment to transforming the Zambian economy through investment.
A CLOSER LOOK
Mining Developments
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, is reportedly in talks to buy a stake in Konkola Copper Mines (KCM). Chris Griffith, CEO for Base Metals of KCM’s current owner Vedanta Resources, told Reuters IRH has expressed interest in acquiring the stake and is conducting due diligence on the copper assets. According to Griffith, Vedanta wants to retain majority shareholding in KCM but could sell up to a 30% stake. He said there were other investors seeking the potential to invest in KCM: “We’ve advanced down the road with a number of partners already that are in the process of doing their due diligence”.
Despite reports in March of IRH’s interest in the acquisition of an 80% stake in Lubambe Copper Mine, JCHX Mining, which had previously agreed to purchase the asset, is now reportedly close to concluding a deal on the purchase. According to sources, the Chinese company’s bid to buy the 80% stake from EMR Capital is nearing completion after Abu Dhabi’s IRH gave up its pursuit of the asset. EMR’s CEO Jason Chang told Reuters, “We are happy to state the transaction as announced is on track and we anticipate to be closing in coming weeks”.
Elsewhere, officials from California-based startup KoBold Metals met with President Hichilema to discuss the development of the Mingomba project, formerly known as Konkola West. The company announced its discovery of a vast copper deposit at the site in February, claiming it to be the country’s largest copper deposit in a century. KoBold aims to produce more than 300,000 tons of copper annually at Mingomba, with shaft sinking set to begin in 2026. Bloomberg reported the company could spend $2.3 billion on the project.
Rail and Transport Development Projects
Following collaboration between the Government of Zambia and TradeMark Africa (TMA), the upgrade of the Nakonde border into a one stop border post (OSBP) has officially been handed over to the contractor. The $10.6m UK government-funded project will improve the flow of goods and people along the Dar es Salaam Corridor. It will streamline operations, enhance customs efficiency, and reduce cargo clearance on both sides of the border. According to TMA’s Director of Southern Africa Jovin Mwemezi, “We are happy to be partnering with the governments of the UK and Zambia to implement such a critical trade facilitation project, which has the potential to catalyse regional trade and facilitate intra-regional commerce.”
Elsewhere, work on the Lobito Corridor, a key railway line connecting Zambia and the DRC to the Angolan port, is ramping up. The Lobito Atlantic Railway operator has ordered 275 modern flatbed railcars for transporting containers along the 1,300km long route. Other plans to revitalise the route include upgrading the tracks, locomotives, and freight cars. When complete, the project will greatly contribute to the development of the region’s transport infrastructure and trade connectivity.
Energy Investment
The Government of Zambia has announced an open access policy in the energy sector in a move to revitalise the country’s energy industry following the challenges it has faced during the drought. The policy – which will enable non-discriminatory access to transmission and distribution networks – aims to create a more competitive environment in the sector in a bid to increase investment from private investors and encourage innovation in sustainable energy solutions.
President Hichilema’s Trip to the UK
President Hichilema embarked on a state visit to the UK where he met with government officials, investors, representatives of Eurobond holders, and members of the diaspora. The Zambian president met with King Charles at Buckingham Palace, affirming the deep relations between the two countries. He later journeyed to Scotland to meet First Minister John Swinney, where Hichilema emphasised Zambia’s core foreign policy message of “economic diplomacy to benefit [Zambian] citizens through investment, trade, and partnership”. Bilateral ties between the two nations are strong: Zambia is one of the Scottish government’s four international development partner countries.
His UK trip saw the president receive an honorary Doctorate from Edinburgh’s Heriot-Watt University “in recognition of his leadership in transforming education” in Zambia, including making education free for every person in the country and recruiting nearly 40,000 new teachers. President Hichilema also visited the University of Oxford. There, he attended a Meeting of Eminent Persons at the Blavatnik School of Government, delivered a keynote address, and engaged with young members of the Zambian diaspora.
Foreign Direct Investment
The Young Presidents Organization (YPO) met in Livingstone this month for its annual conference. Among the attendees – which included over 250 global business leaders from 150 countries – was President Hichilema. In his address to the summit the President encouraged YPO members to invest in Zambia, particularly in health, mining, agriculture, tourism and energy, and pointed to the country’s stable investment climate.
In other news, President Hichilema met with the President of the Japan International Cooperation Agency (JICA) Dr Tanaka Akihito at State House. Over the years JICA has played a key role in supporting development projects in Zambia across multiple sectors, including agriculture, healthcare, education, rural development and capacity building. Hichilema said the country aimed to deepen its relationship with JICA and “leverage their technology in areas such as water harvesting, irrigation, and alternative energy”.
Finally, President Hichilema said farewell to outgoing British High Commissioner to Zambia Nicholas Woolley as he concluded his posting. In a statement posted to Facebook, the President described how during Woolley’s tenure the two countries have deepened relations “based on common values such as democracy, the rule of law, liberty, and the fight against corruption”.
LONG READS
Only way is up for G-20 Common Framework after Zambia debt restructuring (The Africa Report, 07.06.24)
How to speed up sovereign debt restructuring (Financial Times, 13.06.24)
Zambia needs copper rethink to achieve sustainable debt, economists say (The Africa Report, 18.06.24)
From Zambia to Nigeria: Cashing in on Africa’s agriculture opportunities (How we made it in Africa, 19.06.24)
Saudi Arabia’s and the UAE’s quest for African critical minerals (The Arab Gulf States Institute in Washington, 20.06.24)
UPCOMING EVENTS
26 June – 2 July - Zambia International Trade Fair, Ndola, Zambia
3-4 July - Mining on Top Africa (MOTA), Paris, France
17-19 July - Africa Impact Summit, Nairobi, Kenya
22-24 July - 2nd UN Tourism Conference on Brand Africa, Livingstone, Zambia
24-26 July - International Conference on Development and Investment in Infrastructure (DII), Livingstone, Zambia
CONTACT US
If you would like to find out more, receive tailored briefings on specific sectors, or send news stories to be included in the next briefing get in touch via info@zambiaisback.com.