Zambia Investor Briefing: January

Investor Briefing

6 Feb

OVERVIEW

MINING: President Hichilema has announced First Quantum Minerals' delivery of the High-Resolution Airborne Survey to explore Zambia's minerals. Mines Minister Paul Kabuswe has said he expects Zambia to reach 1 million tonnes of copper production by 2026, leveraging expansion and restoration of mines. Barrick Gold is expanding Lumwana Mine, expecting to double production to 240,000 tonnes annually. Saudi Arabia’s Manara Minerals plans to acquire a stake in Zambia’s copper and nickel assets. KoBold Metals has raised $537 million and has announced that it will focus much of these funds on developing Zambia's Mingomba copper project. Mercuria and Zambia have formed a joint metals trading venture to allow Zambia to engage in mineral trading directly.
ENERGY: The $100 million, 100-megawatt Chisamba Solar PV Plant is 71% complete and expected to be operational by May. The World Bank has approved a $292 million Zambia-Tanzania Interconnector Project (ZTIP), which will enhance energy sustainability and affordability in Zambia and connect Eastern and Southern Africa. President Hichilema attended the Mission 300 Africa Energy Summit in Dar es Salaam.
FDI: The Zambia Development Agency (ZDA) announced it had actualised $9.83 billion of the $58.78 billion in committed investments, generating 40,395 jobs from 497 projects in sectors such as energy, manufacturing, transport, and mining.
REGIONAL PARTNERS: President Hichilema attended the SADC’s Organ Troika Summit and addressed Mozambique's political and security challenges, emphasising their impact on regional trade and the urgency for collective action to restore regional stability.

A CLOSER LOOK

Mining Developments

In a landmark announcement, President Hichilema revealed that First Quantum Minerals (FQM) had delivered their High-Resolution Airborne Survey Findings. The survey, provided by First Quantum Minerals (FQM) under the leadership of CEO Tristan Pascall, is a transformative step in unlocking the nation’s untapped mineral wealth. The delivery of the Copperbelt survey signals the beginning of a new phase in this nationwide effort. By providing reliable and high-quality geological data, the survey should attract further investment, increase transparency, and accelerate the development of Zambia’s mining sector.

Meanwhile, in a positive step towards the New Dawn government’s goal of producing 3 million tonnes of copper annually by 2031, Mines Minister Paul Kabuswe announced that copper production in the country is expected to reach 1 million tonnes annually before 2026. By restoring established mines like Mopani Copper Mines and Konkola Copper Mines to full capacity and expanding output at FQM’s Kansanshi Mine and the Barrick super pit, Zambia is well positioned to hit this milestone.

This comes as Barrick Gold Corporation reaffirms its commitment to Zambia’s economic growth. The company is looking to expand its Lumwana Mine operations, building on the $3.7 billion it has contributed to Zambia since 2019. Lumwana’s $2 billion backed expansion is set to double its current copper production to an average of 240,000 tonnes per year over the life of the mine, transforming it into a Tier One copper mine and one of the world’s top 25 producers. The expansion will create 2,500 construction jobs through to 2028 and 1,500 long-term jobs.

In other mining news, Minister for Mines and Minerals Development Paul Kabuswe has told Reuters that Saudi Arabia’s Manara Minerals is actively seeking critical minerals projects in Zambia. Saudi Arabia is among several Middle Eastern economies pursuing deals in critical minerals, including copper and lithium, as part of a region-wide strategy to diversify its economy and reduce its reliance on oil. Manara, a joint venture between Saudi Arabian Mining Company and the kingdom's $925 billion Public Investment Fund, is currently closing in on a deal to buy a minority stake in FQM’s Zambian copper and nickel assets.

KoBold Metals, a Berkeley-based startup backed by Bill Gates and Jeff Bezos, has raised $537 million in a series C funding round, boosting its valuation to $2.96 billion. KoBold’s co-founder and chief executive Kurt House said about 40% of the new capital would be spent developing existing projects into mines, with the Zambian Mingomba copper project taking “the lion’s share of that.” KoBold said that the $2 billion Mingomba site would produce at least 300,000 tonnes per year in the 2030s.

Swiss-based commodities trader Mercuria released a statement confirming it had set up a metals trading arm with Zambia. The unit will enable Zambia to engage directly in the trading of its minerals, maximising the value derived from the country’s natural wealth. "Our joint venture with IDC marks a significant milestone for Zambia as it positions itself more strategically in the global minerals market," Kostas Bintas, Mercuria's global head of metals and minerals, said in the statement.

Energy Projects

The Chisamba Solar PV Plant, a 100-megawatt renewable energy project, is now 71% complete and on track to be commissioned by May this year. News of the Solar Plant’s swift progress was shared by Boyd Kanchela, Chief Executive Officer of Kariba North Bank Power Extension Corporation, at the Energy Forum for Africa (EFFA) Conference as the plant is poised to be a major step forward in Zambia’s renewable energy transition. The EFFA expressed satisfaction with the $100 million project’s progress, reaffirming the forum’s goal to add 500megawatts to Zambia’s energy capacity by the end of the year.

In other energy news, the World Bank has approved the $292 million Zambia-Tanzania Interconnector Project (ZTIP),enabling Zambia to access more sustainable and affordable energy. The ZTIP will also enable electricity access in rural areas, improving education and health services and complementing domestic efforts. The transmission line will complete the connection of the Eastern Africa Power Pool and SouthernAfrican Power Pool, creating the largest geographic energy market in the world—from Cape Town to Cairo. The project comprises $245 million of funding from the International Development Association, $17 million from the UnitedKingdom Foreign Commonwealth & Development Office (FCDO), and $30 millionfrom the European Union (EU).

Earlier this week, President Hichilema attended the Mission 300 Africa Energy Summit in Dar es Salaam. The summit aims to accelerate electricity access for 300 million people across the African continent by 2030. Throughout the two-day summit, Hichilema held bilateral meetings with several private sector global entities and the heads of state of Lesotho, Malawi, and the Ivory Coast. The president took toFacebook to reaffirm his commitment to increasing energy investment and growing the economy, pitching to local and foreign investors

Foreign Direct Investment

The Zambian Development Agency (ZDA) announced it had recorded $9.83 billion of the $58.78 billion in committed investments into actualised projects. These investments are derived from 497 projects spanning multiple sectors, with committed investments of$18.74 billion. The projects have generated 40,395 jobs, surpassing the initial target of 38,119 jobs. “The energy sector led with $2.63 billion, followed by manufacturing with $2.33 billion, transport with $558.96 million, and mining with $481.56 million,” said Albert Halwampa, ZDA Director General. He attributed 2024’s achievements to strong political leadership, successful debt restructuring that bolstered investor confidence, and intensified investment promotion activities.

Regional Partners

Finally, President Hakainde Hichilema attended the Southern African Development Community (SADC) virtual Extraordinary Organ Troika Summit to discuss Mozambique's post-election political situation and insecurity. In his capacity as Outgoing Chairperson of the Organ, President Hichilema highlighted that the political and security situation in Mozambique is not only affecting the people of Mozambique but also hindering regional trade in critical sectors like energy and transport. He underscored the need for the SADC Community to firmly support interventions to restore peace and stability in Mozambique through collective action in promoting regional security and cooperation.

LONG READS

What to know about the Lobito Corridor - and how it may change how minerals move (Atlantic Council, 20.12.24)

US and China scramble to control Africa's mineral riches (The Times, 22.12.24)

Zambia’s comparability conundrum (Financial Times, 03.01.25)

Zambia’s Road to Growth and Better Jobs (World Bank, 16.01.25)

UPCOMING EVENTS

03-04 February — 121 Mining Investment — Cape Town, South Africa

03-05 February — Invest Africa Mining Series — Cape Town, South Africa

03-06 February — Mining Indaba — Cape Town, South Africa

12 February — African Business Forum — London, UK

12-13 February — Africa Tech Summit — Nairobi, Kenya

17 February — Africa Business Forum — Addis Ababa, Ethiopia