BackChat Season 2 Ep. 3: German Ambassador Anne Wagner-Mitchell

How can Germany and Zambia work together to mitigate climate challenges? How will the relationship between the two countries develop? What sectors within Zambia are the most promising for German investment?

Tune in to hear German Ambassador Anne Wagner-Mitchell's thoughts, alongside some exciting examples of German investment in the country.

Zambia Investor Briefing: November 2023

OVERVIEW

•    Zambia has selected the UAE’s International Resource Holdings (IRH) as the new strategic equity partner in Mopani Copper Mines, according to the mine’s owner ZCCM. IRH is linked to Abu Dhabi’s most valuable listed company, International Holdings Company (IHC). Mines Minister Paul Kabuswe has said details of IRH’s investment and level of equity participation in Mopani will be revealed when negotiations are complete. It is expected to invest funds into the mine to help with short-term working capital and to finance the completion of the mine development. IRH will also work to “reset” Mopani’s existing relationship with Swiss mining conglomerate Glencore. This is good news for Zambia, which has been searching for a new investor in Mopani since the state took control of the assets from Glencore in 2021.

•    Zambia has experienced a significant setback in its debt restructuring process after its official creditors, led by China, rejected a deal of almost $4 billion, despite approval in principle by the IMF. According to the finance ministry, the Zambian government “currently does not have the support” of official creditors and is “unable to move forward at this time” on a deal with bondholders. This is disappointing news, especially following October’s reports that Zambia had reached a huge milestone in its debt restructuring process. Despite this, however, the IMF has grounds for optimism that key lenders will still agree to a restructuring deal. Finance Minister Situmbeko Musokotwane has said Zambia hopes to complete the restructuring “as soon as possible” and is engaging closely with all creditors.

•    President Hakainde Hichilema travelled to Italy on a two-day state visit to strengthen bilateral relations between the two countries. While there, he met the country’s president, Sergio Mattarella, with whom he discussed future opportunities to enhance Zambian development by means of alliances with Italian businesses, particularly in the industries of agriculture, mining, energy and tourism. Among the highlights of the Zambian president’s visit was his delivery of the keynote address at the Zambian-Italian Business Forum in Rome.

•    Hichilema embarked on a trip to Germany where he undertook extensive economic diplomacy engagements. This included the G20 Compact with Africa, where he addressed a delegation of industry leaders in Germany. On the margins, he held bilateral talks with German Chancellor Olaf Scholz regarding the investment of German businesses in the Zambian agricultural sector.

•    During his trip to Germany, Hichilema held bilateral meetings with the president of the World Bank Ajay Banga, and the IMF Managing Director Kristalina Georgieva. Both talks were focused on the need for a swift resolution to the remaining elements of Zambia’s debt restructuring programme.

•    The Africa Fintech Summit was hosted this month in Lusaka. It brought together industry leaders, policymakers, investors, and entrepreneurs to explore the opportunities and challenges of the future of fintech on the continent. Technology and Science Minister Felix Mutati announced at the Summit Zambia’s plans to open a new smartphone factory by June 2024, which he hopes will “foster inclusivity when it comes to connectivity” and boost the reach of fintech startups in the country. 

•    According the Tanzania-Zambia railway authority, the Chinese government has asked China Railway Construction Corp., a state-owned firm, to negotiate a concession to operate a railway line connecting Zambia with the port of Dar es Salaam in Tanzania. The authority plans to revive the Tazara railway, which has fallen into disrepair in past decades but originally had a capacity of about five million tons per year. It has been a big year for Zambian rail networks: the US and EU have pledged to support the development of the Lobito Corridor, which will connect the Copperbelt region in Zambia and the DRC to Angola’s port of Lobito.  

•    Hichilema commissioned the Kasama Airport in the Northern Province. It is hoped the airport will serve as a “key hub for economic expansion in the northern circuit”.

Zambia Selects UAE’s IRH as New Partner for Mopani

Zambia has selected the UAE’s International Resource Holdings (IRH) as the new strategic equity partner in Mopani Copper Mines, according to the mine’s owner ZCCM. IRH is linked to Abu Dhabi’s most valuable listed company, International Holdings Company (IHC). This development signals the end to the speculation as to who would be Mopani’s investor, with South Africa’s Sibanye Stillwater and China’s Zijin previously in the running.

Mines Minister Paul Kabuswe has said details of IRH’s investment and level of equity participation in Mopani will be revealed when negotiations are complete. It is expected to invest funds into the mine to help with short-term working capital and to finance the completion of the mine development. IRH is also expected to “reset” Mopani’s existing relationship with Glencore.

The partnership is expected to increase copper production at the mine to more than 200,000 metric tons per annum, according to ZCCM. It has previously said Mopani would require $300 million in investment to expand output over the next three years, with an extra $150 million to sustain its operations.

This is good news for Zambia, which has been searching for a new investor in Mopani since the previous government took control of the assets from Glencore in 2021 and agreed to pay the company $1.5 billion in a deal funded by debt. According to ZCCM: “The proposed investment in Mopani is the largest single investment to date by IRH and represents a key step in the development of its strategy to become a major player in the African minerals sector”.

Hichilema Visits Italy to Strengthen Bilateral Ties

President Hakainde Hichilema travelled to Italy on a two-day state visit to strengthen bilateral relations between the two countries. While there, he met the country’s president, Sergio Mattarella, with whom he discussed future opportunities to enhance Zambian development by means of alliances with Italian businesses, particularly in the industries of agriculture, mining, energy and tourism.

Among the highlights of the Zambian president’s visit was his delivery of the keynote address at the Zambian-Italian Business Forum in Rome. Sponsored by the Zambian Chamber of Commerce and supported by the Zambian Development Agency (ZDA), the forum was attended by both Zambian and Italian companies.

While in Italy, Hichilema also met with both Qu Dongyu, Director-General of the Food and Agriculture Organization (FAO) and Alvaro Lario, President of the International Fund for Agricultural Development (IFAD) to discuss food and nutrition security in Zambia.

OTHER NEWS

The US and EU plan $1 billion-plus Africa rail link for key minerals 01.11.23, Bloomberg

Remittance fintech app Minit Money launches money sending to Zambia 3.11.23, Fintech Finance News

Zambia’s president calls for more bilateral cooperation with Türkiye 08.11.23, AA

Anglo starts exploratory drilling on copper licences in Zambia 13.11.23, Mining Weekly

What’s in store for China-Africa relations in 2024? 27.11.23, African Business

Koryx Copper starts a geophysical survey in Zambia 29.11.23, Yahoo Finance

UPCOMING EVENTS

SuperReturn Africa 2023 - 04-06.12.23, Cape Town, South Africa

COP28 Networking Reception – Invest Africa - 05.12.23, Dubai, UAE

BackChat Season 2 Ep. 2: British High Commissioner Nicholas Woolley

What is the UK doing to support investment into the country? Is the UK involved in the renewable sector here? What will Zambia get out of the UK-African Investment Summit next year?

Find out through taking a listen to Choolwe Chibomba's conversation with Nicholas Woolley, British High Commissioner to Zambia.

Zambia Investor Briefing: October 2023

OVERVIEW

•    On 26 October, in a huge milestone in the country’s debt restructuring process, Zambia announced it had reached an agreement in principle regarding the restructuring of $3 billion of its international bonds with key creditors. Finance Minister Situmbeko Musokotwane said in a statement the agreement “paves the way for similar restructuring agreements with our private creditors”. Earlier this month, the country had also agreed to a Memorandum of Understanding (MoU) with its official creditors – which includes China and members of the Paris Club – to restructure $6.3 billion of debt.

•    Abu Dhabi’s International Holding Company (IHC) has signalled its interest in Mopani Copper Mines. Zambia’s state-owned investment vehicle Zambia Consolidated Copper Mines (ZCCM) took control of Mopani Copper Mines back in 2021, after global commodities powerhouse Glencore sold its stake for $1.5bn.

•    The African Development Bank (AfDB) and Africa Finance Corporation (AFC) have recently joined the US and EU in support of the development of the Lobito Corridor, a trans-African railway line connecting Zambia and the DRC to regional and global markets through the port of Lobito on Angola’s west coast. A seven-side Memorandum of Understanding was signed regarding this on the margins of the Global Gateway Forum in Brussels.

•    Barrick Gold has pledged an investment of nearly $2 billion in a bid to increase copper production at its Lumwana mine to a projected 240,000 tonnes. The company, which has previously announced plans to explore more copper deposits along the African Copperbelt, has announced it hopes to extend the life of the Lumwana mine to 2060. Barrick’s President and Chief Executive Mark Bristow said: “In Zambia as elsewhere in our global network, we seek to share the economic benefits generated by our mines with the countries’ governments and people”.

•    Zambia has officially become the sixth country to receive SpaceX’s Starlink internet service, providing high-speed broadband and uncapped service to even remote regions of the country via satellite. President Hichilema had originally opened talks with Starlink in 2022. It is currently available in the country in specific areas, but the company plans to expand its coverage in the coming months.

•    President Hichilema attended the Zambia-China Jiangxi Investment and Trade Cooperation Promotion Conference in Chibombo District. There, he also commissioned the Chibombo Jiangxi Economic Cooperation Zone. The conference follows a month on from the president’s state visit to the People’s Republic of China, where he signed several MoUs to further cement the trade and investment partnership between the two countries.

•    President Hichilema, along with Mozambican President Felipe Nyusi and Malawi’s Lazarus Chakwera, have signed three agreements for the management of the Nacala Corridor in Mozambique. The agreements, aimed at strengthening the corridor’s operations strengthening the region’s development, were signed at the inauguration ceremony of the rehabilitated, expanded, and modernised infrastructures of Nacala Port. The rail corridor runs from the port of Nacala to the landlocked Malawi and Zambia, and will provide Zambian businesses with a shorter and more efficient trade route.

•    President Hichilema hosted a delegation from K.E. International Consortium, an organisation that consults on large-scale renewable and sustainable projects and business development and is interested in creating Public-Private Partnership (PPP) projects with Zambia. The organisation’s areas of interest include infrastructure development, electric vehicle battery production, and renewable energy work to agriculture and agro-processing.

Zambia Reaches Deal for Debt Relief

On 26 October, Zambia announced it has reached an agreement in principle regarding the restructuring of $3 billion of its international bonds with key creditors – a huge milestone in the country’s debt restructure process. The deal is a set to provide $2.5 billion of cash-flow relief during the country’s $1.3 billion IMF programme which expires in 2025.

Finance Minister Situmbeko Musokotwane said in statement the agreement “paves the way for similar restructuring agreements with our private creditors”. The Zambia External Bondholder Steering Committee also welcomed the agreement, saying it would “restore full international capital markets access to Zambia and encourage long-term investment in the country”.

This announcement followed news earlier in the month that the country had agreed to a Memorandum of Understanding (MoU) with its bilateral creditors – including China and members of the Paris Club – to restructure $6.3 billion of debt. The agreements mean Zambia will pay about $910 million in the next decade, compared to almost $6 billion that was due to official creditors before the debt restructuring process.

UAE’s IHC Expresses Interest in Mopani Copper Mines

Abu Dhabi’s International Holding Company (IHC) has signalled its interest in Mopani Copper Mines. Zambia’s state-owned investment vehicle Zambia Consolidated Copper Mines (ZCCM) took control of Mopani Copper Mines back in 2021, after global commodities powerhouse Glencore sold its stake for $1.5 billion.

IHC has now emerged as the newest outfit looking to invest in Mopani. Its main competitor for the bid is South Africa’s Sibanye-Stillwater, since two Chinese corporations, Zijin Mining and Norinco, pulled out of the process.

Mopani is one of Zambia’s largest assets. President Hichilema has placed specific emphasis on copper production, setting an ambitious target of producing over three million tonnes of copper nationally by 2032. His recognition of copper’s significance has played a major part in the renewed interest of external investors in Zambia.

OTHER NEWS

Coal miner Exxaro hunts for copper assets in Congo, Zambia and Botswana 04.10.23, Reuters

Sibanye CEO says Zambia’s Mopani Copper Mines investment not ‘onerous’ 04.10.23, Reuters

Zambia plans to sell a green bond, regulate carbon credits 06.10.23, Bloomberg

South Africa: Minister Pandor undertakes working visit to Zambia 20.10.23, African Business

EU courts Africa in early push to counter Chinese spending 25.10.23, Bloomberg

As critical minerals gain importance, Standard bank eyes investment in DRC and Zambia 26.10.23, Arican Business

Anglo, Arc agree $90m Zambia exploration joint venture 27.10.23, Mining Weekly

UPCOMING EVENTS

Zambia International Mining + Energy Conference 01-2.11.23, Kitwe, Zambia

Africa Fintech Summit - 02-03.11.23, Lusaka, Zambia

Intra-African Trade Fair - 09-15.11.23, Cairo, Egypt

Africa Tech Festival - 13-16.11.23, Cape Town, SA

Zambia Investor Briefing: September 2023

OVERVIEW

• Vedanta will take back ownership of Konkola Copper Mines (KCM), four years after the group was removed from its operations in Zambia by Edgar Lungu’s government. It was announced earlier this month that Vedanta, owned by Anil Agarwal, will invest $1 billion over the next five years to revive KCM. It will also fund $250 million of payments to local creditors of the mine to restore its majority stake.

• Albert Halwampa, Director General of the ZDA, has announced pledges by Chinese firms to invest in Zambia to the total of $1.4 billion. This came during President Hakainde Hichilema’s six-day visit to the People’s Republic of China, undertaken to enhance the economic diplomacy between the two countries. There, he addressed the country’s potential investors at the Zambia-China Investment and Tourism Promotion Conference in Jinggangshan, Jiangxi Province. Hichilema’s itinerary also included visits to local authorities, various heads of industry, and investors.

• At the G20 Forum in India, the US and the EU pledged their support of the Lobito Corridor Project, a trans-African railway line connecting Zambia and the DRC to regional and global markets through the port of Lobito on Angola’s west coast. As a first step, they will launch feasibility studies for a greenfield rail-line expansion between Zambia and Angola. The US and EU have also promised to upgrade critical infrastructure across sub-Saharan Africa in order to “unlock the enormous potential of this region”. Once completed, the Corridor would offer the shortest route to transport exports such as critical minerals from inland to the coast, and will also greatly benefit the region’s import economy.

• Silicon Valley start-up KoBold Metals has said it aims to start producing copper and cobalt in Zambia within 10 years. The company is investing $150 million in its development of a copper deposit at Mingomba in Copperbelt Province. Mfikeyi Makayi, KoBold’s Zambian CEO, said, “It’s a very attractive project and we have said within a decade we would want Mingomba to be a producing mine”. KoBold uses AI to facilitate its search for critical minerals including copper, cobalt, nickel, and lithium.

• Zambia has signed a Memorandum of Understanding (MoU) with two Chinese companies – the Development Company of China and the Guangxi Fenglin Wood Industry Group – to launch a 4 million hectare carbon offset venture in the country. Across 5% of all land in Zambia, trees will be planted and forests preserved. This venture will produce 23.25 million carbon credits a year, and the scheme is set to employ of 65,000 people.

• In a lecture at the University of Zambia, the International Monetary Fund (IMF)’s Resident Representation Preya Sharma said Zambia’s economic growth had rebounded with inflation at a declined growth rate of 5% compared to 2019’s 1.5%, a great improvement of the country’s medium-term growth prospects.

Vedanta to Resume Production at KCM

Vedanta will take back ownership of Konkola Copper Mines (KCM), four years after the group was removed from its operations in Zambia by Edgar Lungu’s government. It was announced earlier this month that Vedanta, owned by Anil Agarwal, will invest $1 billion over the next five years to revive KCM. It will also fund $250 million of payments to local creditors of the mine to restore its majority stake, as well as a one-time payment of K2,500 to each mineworker.

Vedanta left the mine in 2019 when Lungu, in pursuit of nationalised mining across Zambia, seized control of it. The PF then used its 20% stake to place KCM in provisional liquidation. Since 2021, however, Hichilema’s government has been making efforts to reanimate the copper sector. This deal struck with Vedanta to restore KCM’s mining operations is one of the many new government initiatives to drive growth in the mining sector.

Anil Agarwal, Vedanta’s owner, said that the goal of the mining company would be to “become a fully integrated producer of copper and cater to India’s fast-growing demand while also making Zambia the leading producer of copper in the world”. Vedanta has pledged to double annual production to 100,000 tonnes, with the goal of reaching 200,000 tonnes as quickly as possible.

Chinese Firms to Invest $1.4 Billion in Zambia

Albert Halwampa, Director General of the ZDA, has announced pledges by Chinese firms to invest in Zambia to the total of $1.4 billion. This came during President Hakainde Hichilema’s six-day visit to the People’s Republic of China, undertaken to enhance economic diplomacy between the two countries. There, he addressed the country’s potential investors at the Zambia-China Investment and Tourism Promotion Conference in Jinggangshan, Jiangxi Province.

Hichilema’s itinerary also included visits to local authorities, various heads of industry, and investors. Upon his return, Hichilema announced the economic relationship between the two countries had been upgraded to a Comprehensive Strategic and Cooperative Partnership, with special focus on the areas of mining, agriculture, clean energy, and infrastructure.

The investments by Chinese firms in Zambia include: $800 million by Pingxiang Huaxu Technology for a wind and solar power project; $450 million for a photovoltaic solar project in Lusaka; and $290 million in lithium battery manufacturing by Jiangxi Special Motor Company.

Diplomatic highlights of Hichilema’s visit included meetings with President Xi Jinping and Zhao Leji, Chairperson of the Standing Committee of the National People’s Congress. The Zambian president also met with China’s Prime Minister Li Qiang, and expressed his “deep appreciation” for Li’s leadership during Zambia’s complex debt restructuring negotiations.

OTHER NEWS

Zambia’s copper FDI deal positive for growth and external liquidity 12.09.23, Fitch Ratings

Hope for Zambia’s path to sustainable development 15.09.23, United Nations

China, Zambia to encourage greater use of local currency in trade, Chinese state media report 15.09.23, Reuters

Liquid Intelligent Technologies Zambia launches Azure Stack, heling businesses access cloud solutions that meet local compliance requirements 21.09.23, African Business

China and Zambia: A new chapter beyond debt? 22.09.23, The Diplomat

United States supports construction of Mukungule Community Resource Board Office 22.09.23, African Business

Europe lines up African minerals pact to ease reliance on China 27.09.23, Bloomberg

UPCOMING EVENTS

AFSiC: Investing in Africa - 09-10.10.23, London ,UK

FT Africa Summit - 12.10.23, London, UK

UK-DRC Energy Transition Investment Forum - 16.10.23, London, UK

US-Africa Trade and Investment Global Summit 2023 - 18-21.10.23, Atlanta, Georgia

BackChat Season 2 Ep.1: Swedish Ambassador Johan Hallenborg

Tune in as Choolwe Chibomba speaks with Johan Hallenborg, Swedish Ambassador to Zambia, as they speak about sustainable mining in the country as well as the positive impact the debt restructuring deal has had on investment into the country.

Mopani Copper Mines in Zambia Attract Major Interest from UAE’s IHC

Zambia’s state-owned investment vehicle ZCCM took control of Mopani Copper Mines back in 2021, after global commodities powerhouse Glencore sold its stake for $1.5bn. Since then, ZCCM have been searching for new investors and received a lot of interest.

Mopani Copper Mines is a prized national asset in Zambia, managing one of Africa’s largest copper deposits. Despite unprecedented difficulties in the past year and mismanagement by the previous government under Edgar Lungu, the mine remais an appealing asset for global investors.

This is especially the case in view of current President Hakainde Hichilema’s major efforts to revamp the Zambian economy towards prosperity, for which mining plays a major role.

Mopani Copper Mines Facility.

President Hichilema has placed specific emphasis on copper production, setting an ambitious target of producing over three million tonnes of copper nationally by 2032. His recognition of copper’s significance has played a major part in the renewed interest of external investors in Zambia, putting the country emphatically back on the map.

Copper is a crucial component in everything from power lines, to electric cars and renewable energy infrastructure. It is an essential component for lithium-ion batteries, demand for which is soaring thanks to the electric vehicle boom. Mopani is therefore a pivotal asset for technological development both globally and within Zambia.

Abu Dhabi’s International Holding Company has now emerged as the newest outfit looking to invest in Mopani, according to reports by the Financial Times. The IHC is the UAE’s largest listed company. Its bid rivals the efforts of Sibanye-Stillwater, the multi-national mining company based in South Africa.

IHC’s head office in Abu Dhabi.

Since two Chinese corporations, Zijin Mining and Norinco (a defence company), which both initially contended for the mine, recently dropped out, Sibanye-Stillwater had been the main contender. Zijin withdrew because of delays on the Zambian side of the process, while Norinco had sanctions imposed on it by the US government.

The fresh interest from IHC signals the growing influence of Middle Eastern wealth in the global mining industry as well as the increasingly diversified investment in the Zambian economy.

Zambia, bilateral creditors agree debt rework memorandum of understanding

MARRAKECH, Morocco, Oct 14 (Reuters) - Zambia has agreed a memorandum of understanding (MoU) with its bilateral creditors on restructuring about $6.3 billion of debt, almost three years after the southern African country defaulted, the finance ministry said on Saturday.

Zambia was the first African country to default on its debt in the pandemic era and its restructuring process saw it agree broad terms to rework the debt with official creditors including China and members of the Paris Club of creditor nations in June.

"Each official creditor will now begin their internal process to sign the MoU. Following the signing of the MoU, the terms will be implemented through bilateral agreements with each member of the OCC (Official Creditor Committee)," a ministry statement said.

The agreements will include an average extension of debt maturities of more than 12 years, with interest rates set at 1% during the next 14 years and up to 2.5% after that. There is a mechanism to increase payments if Zambia's economy performs better than expected.

Zambia will pay about $750 million in the next decade compared to almost $6 billion that was due to official creditors before the debt restructuring.

"The next step is to secure a comparable agreement with our private creditors," Zambia's finance minister, Situmbeko Musokotwane, said.

Zambia is committed to remaining in arrears to its commercial external creditors, the ministry said, until it secures a debt deal with comparable terms to the official creditor agreement.

This article originally appeared on Reuters

Zambia Becomes Sixth African Country to Receive Starlink’s High-Speed Internet Service

Zambia has officially become the sixth country to receive SpaceX’s Starlink internet service, providing high-speed broadband and uncapped service to even remote regions of the country via satellite. It is considered the world’s most advanced broadband satellite internet, marking an exciting step forward in Zambia’s journey to deliver internet access to more of its population. 

Starlink satellite in orbit

Developed at Elon Musk’s pioneering SpaceX, Starlink has become the world's first and largest satellite constellation, using low Earth orbit to deliver broadband internet that is capable of supporting optimal digital performance in business, streaming, online gaming, video calls and more. Through advanced satellites and user hardware combined with deep experience with spacecraft as well as on-orbit operations, Starlink promises to deliver high-speed, low-latency internet to users all over the world.

The news also comes as a major step forward for Zambia in delivering on its target of 80% of citizens having access to the internet by 2026.

More efficient broadband will allow for a greater use of digital technologies in the Zambian economy; reduce government transaction costs and the costs of business through digital optimisation; improve the adoption of digital solutions through empowering and enabling business services and entrepreneurship; and enhance digital systems and the transfer of data, improving sector-specific outcomes in secondary towns and rural areas.  

Starlink also caters for the ability to offer internet connectivity to those in more remote areas. By using satellites to transmit data, Starlink does not have to rely on ground based infrastructure but can provide signal directly to schools, homes, and businesses in rural areas.

President Hakainde Hichilema opened talks directly with Starlink in 2022, as part of his government’s work to ensure all Zambians can have access to high quality and affordable internet. As a result, more Zambians will be connected across the world and able to participate in the ever-growing digital economy. 

President Hichilema meeting with Starlink representatives

The launch of Starlink in Zambia further demonstrates how an engagement with external partners and the private sector can open up access to better services for its people. The government can be satisfied by achieving a landmark step forwards in the target set by its Presidential Delivery Unit (PDU) – to deliver digital inclusion that can ensure 80% of Zambians have access to the internet by 2026.

This digital inclusion will also massively support the government’s goal to facilitate greater uptake of its flagship Constituency Development Fund (CDF). This fund provides capital to community projects, local infrastructure, and business at a constituency level and can be accessed via the internet. Under President Hichilema, the CDF has expanded to K27 million ($1.26 million) per constituency.

Furthermore, internet connectivity is paramount for tackling inequality. By allowing more citizens to have affordable and efficient internet connections, jobs and education will become more accessible, helping to reduce poverty.

President Hichilema’s pursuit of Starlink is vindicated by recent research, which shows that universal and affordable internet coverage can not only raise economic growth per capita by at least 2% annually, but also reduce the number of people experiencing poverty by 1%. Coupled with infrastructural investments in human capital, such as education or training, this could even rise to 5% and 2.5% respectively.

Starlink in Zambia

Starlink has already had a positive impact in other African countries. In May 2022 Musk announced Starlink’s entry into Africa, beginning with Nigeria and Mozambique. The service was already active in Nigeria by January 2023, with then President Buhari even boasting of the 100% broadband connection that Starlink provided.

Mozambique has since witnessed revelations in its telecommunications, as more people have been provided with access to the same level of services as those in more developed countries. The country’s quality of education has also increased drastically, with far easier access to online resources and educational softwares. Other long-term benefits of economic growth are sure to follow.

Zambia’s Creditor Group Sees $6.3 Billion Debt Deal in Days

• Progress on talks has been slow since June deal-in-principle

• Group plans MOU on $6.3 billion of debt by end of IMF meeting

Zambia’s official creditor committee plans to sign a memorandum of understanding to restructure $6.3 billion of debt by the close of the International Monetary Fund’s annual meeting next week, two people familiar with the matter said. The nation’s dollar bonds rallied.

The government has made slow progress in talks since June, when it reached a deal-in-principle with the committee co-led by China and France. The agreement would see the interest rates cut to as low as 1% and the loans only repaid in 2043, with a 40% reduction in net-present value of the debt.

Zambia, which became Africa’s first pandemic-era sovereign defaulter in 2020, has struggled to come to an deal with creditors. Earlier this year, the IMF withheld a near-$190 million disbursement because of delays in the group agreeing to debt relief. China is by far Zambia’s biggest bilateral creditor.

While they are targeting to sign the pact next week, technical aspects are still being discussed and it may not be possible to conclude in time, one of the people said, who asked not to be identified as the information isn’t public. The nation will finalize and execute the memorandum of understanding by the end of the year, Finance Minister Situmbeko Musokotwane said Sept. 29.

Debt Distress

Emerging market debt distress and China’s role as a major lender, will be a key topic at next week’s IMF meetings in Marrakesh, Morocco. Some of Sri Lanka’s official creditors are also pushing to reach their own deal ahead of the gathering to restructure its liabilities without the participation of China. The IMF is helping to push a broader “roundtable” to hammer out the way forward on handling debt treatments between the Paris Club, China, private creditors and others.

Zambia’s July 2027 dollar bonds jumped to their highest in two weeks and were quoted at 55 cents on the dollar after reports of the imminent deal.

The Paris Club, an informal group of mostly developed countries of which China is not a member, last week expressed confidence that an agreement will be signed by the IMF’s meetings, one of the people said. The club didn’t immediately respond to an email seeking comment.

Zambia also still needs to reach a restructuring deal with commercial lenders, including the holders of $3 billion in eurobonds, that provides comparable treatment to what the official creditors agreed to.

This article originally appeared on Bloomberg.

Barrick Gold to invest nearly $2 bln in Zambia mine to raise copper output

Barrick Gold (ABX.TO) said on Wednesday it would invest nearly $2 billion as part of a project to increase copper production at its Lumwana mine in Zambia.

The expansion is part of the company's plans to extend the life of the mine to 2060. Zambia is Africa's second-largest copper producer after its northern neighbour, the Democratic Republic of Congo.

The project aims to complete the full feasibility study by the end of 2024, bringing the expanded production forward to 2028, the company said.

Barrick had in July said it was keen to explore more copper deposits in Zambia and Congo, seeking to expand its presence on the African copperbelt.

This article originally appeared on Reuters.

Billionaire-backed KoBold Metals plans new Zambian copper mine within a decade

NAIROBI, Sept 25 (Reuters) - California-based KoBold Metals, whose backers include billionaires Bill Gates and Jeff Bezos, said it aims to start producing copper and cobalt at a project in Zambia within 10 years.

KoBold is spending about $150 million to accelerate its search for more deposits at the Mingomba project, located along the fabled African copper belt.

The additional studies will be completed in 2024, said Mfikeyi Makayi, the Zambian CEO of the Silicon Valley start-up.

"It's a very attractive project and we have said within a decade we would want Mingomba to be a producing mine," Makayi told Reuters.

KoBold uses artificial intelligence to search for copper, cobalt, nickel and lithium that the world needs for the clean energy transition and to accelerate growth in electric vehicles.

KoBold is backed by Breakthrough Energy Ventures, a climate and technology fund whose other backers include Virgin Group's Richard Branson and Bridgewater Associates' Ray Dalio.

The company's investors understand the lengthy period it takes to build the mine and that securing supplies of these metals is critical, Makayi said.

"They may not be your traditional, conventional backers, but the global need is so critical, it's basically a crisis," Makayi said. "That's why the buy-in is there, for people to be willing to be with us for the long haul, that just shows the commitment to what we are doing."

KoBold also searches for critical metals with BHP Group (BHP.AX) and Rio Tinto (RIO.L) at projects in Australia. Commodity investor EMR Capital and Zambia's ZCCM-IH (ZCCM.LZ) also own stakes in Mingomba.

The United States is looking for alternative sources of supply for critical metals and the funding from American investors has enabled KoBold to ramp up exploration, Makayi said.

KoBold wants to find more deposits as big as Mingomba in Zambia and would also explore opportunities in Botswana, Namibia and the Democratic Republic of Congo, Makayi said.

She wouldn't say if KoBold would partner with BHP and Rio Tinto to develop Mingomba. KoBold's own internal capacity could advance the mine, Makayi said, when asked if the firm would consider a joint venture.

The deposit has a defined resource of about 247 million tons of ore with an average grade of 3.64% copper, or an estimated 9 million tons of copper, according to KoBold.

"Maybe they will come in, it doesn't have to be in Zambia, it could be Namibia or Botswana. They're our partners but those discussions are yet to be had," Makayi said.

Reporting by Felix Njini; Editing by Lincoln Feast and Anil D'Silva.

This article originally appeared in Reuters.

BackChat Ep. 5: Albert Halwampa

This episode we speak with Albert Halwampa of the Zambia Development Agency to understand more about investing in Zambia and what his projections for the country are for the next 12 months.

Lobito Corridor Railway Line Linking Zambia, the DRC, and Angola Supported by the US and EU

Zambia is one of three countries at the heart of a planned trans-African railway line connecting southern Democratic Republic of Congo (DRC) and northwestern Zambia to regional and global markets through the port of Lobito on Angola’s Atlantic Coast.  

The original railway line, which will be used as the foundation for the Lobito Corridor, was first constructed early in the twentieth century but severely damaged during Angola’s civil war. The new projected line will run along the existing railway for 1,300km across the country, connecting the Lobito port to Luau in eastern Angola. It will then extend another 400km through to Kolwezi in the DRC and Zambia, in the heart of the copper belt region.

Presidents Tshisekedi, Lourenço and Hichilema at the ceremony for the concession transfer the corridor (DRC Presidency)

A Partnership of Countries and Companies

On 4 July, the presidents of the three countries – Zambia’s Hakainde Hichilema, DRC’s Félix Tshisekedi, and Angola’s João Louenço – gathered at the Lobito Corridor Ceremony to mark the official transfer of operational concession for the railway line and mineral terminal to the Lobito Atlantic Railway (LAR) consortium joint venture company.

LAR is comprised of Trafigura, a market leader in the global commodities industry, Mota-Engil, an international construction and infrastructure management company, and Vecturis SA, an independent rail contractor.

Jeremy Wier, speaking on behalf of the LAR concession companies, described the corridor as “a partnership between the private and public sectors”, as well as a partnership of three countries and three companies. “We believe the Lobito rail corridor has huge potential to boost the development of sectors along the line including heavy industry, agriculture and mining, creating new jobs and opportunities”, he added.

Trafigura of LAR has revealed its plans to invest $455 million in Angola and up to $100 million DRC. Its plans for Zambia are yet to be announced.

Support from the US and the EU

On 9 September, at the G20 Forum in India, a joint statement was released from the United States (US) and the European Union (EU), welcoming the project and promising the support of the two countries.

As a first step, the US and EU have pledged to launch feasibility studies for a greenfield rail-line expansion between Zambia and Angola. They also promise to upgrade critical infrastructure across sub-Saharan Africa in order to “unlock the enormous potential of this region”.

The region is rich in critical minerals, such as copper, cobalt, manganese, zinc, and lithium. The Corridor would offer the shortest route to transport these minerals from inland to the coast; various routes previously used – such as through South Africa, Tanzania, Namibia, or Mozambique – take longer. The estimated average travel time from southeastern DRC to the coast will be cut from 30 days to eight.

Map of the Lobito Corridor (US Government)

The US-EU statement says, “By significantly reducing the average transport time, the new railway will lower the logistics costs and carbon footprint of exporting metals, agricultural goods, and other products, as well as for future development of any mineral discoveries”.

The Corridor will also be hugely beneficial for the region’s import economy. Mining inputs, as well as agricultural products and consumer goods, can be channelled into the region at greater speed.

Critical to the Green Energy Transition

The Lobito Corridor development is inextricably tied to the global transition towards clean energy systems. A plentiful supply of critical minerals is essential to this shift: the International Energy Agency said clean energy technologies, such as solar photovoltaic (PV) plants, wind farms, and electric vehicles generally require more wind to build than their fossil-fuel equivalents. It is therefore central to the project that critical minerals such as copper, cobalt, and lithium are mined in high quantities in the countries linked by the Corridor.

The new railway line will aid a greener and brighter future in the region in other ways. Rail has a much lower carbon footprint compared to road transport. In a statement released to mark the transfer of the railway services concession, LAR said the development of the rail corridor “promises environmental and safety benefits” by removing trucks from the road and thus reducing border delays and road traffic accidents, as well as cutting air pollution and carbon emissions.

Additionally, the US and EU have said they would cooperate with the three African countries in growing agricultural value chains to enhance local food production for the region’s growing population, as well as pledging support for local Small and Medium Enterprises (SMEs) and economic diversification.

The international and regional communities’ support for the Lobito Corridor project demonstrates its potential as a catalyst for growth and investment in Zambia, as well as for the transition to clean energy globally.  

BackChat Ep.4: Wika Kawina

Tune in as Choolwe Chibomba catches up with Wika Kawina of Wilocate Logistics on her hopes for Zambian business in the next 12 months as well as her experience in the logistics industry.

Two years of HH has brought a wave of optimism to Zambia

Analysts anticipate that mining investors will flock to Zambia, still one of the biggest copper producers globally, especially since President Hakainde Hichilema came into office in August 2021 and announced a range of incentives, such as a sliding royalty rate for mines, to lure back investors.

Hichilema, or ‘HH’ as the investor community call him, has announced that he wants Zambia’s mining sector to be the country’s foremost revenue generator. He subsequently set a target to increase its copper production from 800,000 tons a year to three million tons a year in the next three years – a bold aim, especially since the Konkola and Mopani copper mines haven’t resumed production yet.

But overall, Zambia’s mining sector appears to be on track for renewed activity from international mining companies. In 2022, First Quantum Minerals announced $1.35bn worth of new projects in the country, while Anglo American announced a return to full-scale copper exploration after it signed a provisional joint-venture agreement with Aim-listed mining and exploration company Arc Minerals. In addition, KoBold Metals, a Californian-based metals explorer, is busy raising $200m to develop the copper reserves it recently acquired in Zambia, the Wall Street Journal reports.

The projects announced by both these miners are a sure vote of confidence in the Hichilema administration.

Exploration is an equally important aspect of Hichilema’s investment drive into Zambia’s minerals sector and the government is currently doing geological mapping for the remaining 45% of the country, while the existing 55% will be updated.

Unfortunately, Hichilema has also had to deal with numerous problems since he took over the reins from the Lungu presidency, an era in which mining companies faced insecurity of tenure, high royalty rates, and the withholding of VAT refunds.

Delivering on promises has been harder and slower than anticipated, says Marcus Courage, CEO of Africa Practice. It has involved drawn-out negotiations with creditors for debt restructuring, cleaning up the country’s cadastral system after widespread licensing corruption, restructuring Mopani, settling the Konkola disputes, and addressing the power crisis. “These things are all taking much longer than anticipated,” says Courage.

The mining cadastre was subject to a detailed audit over eight months. They went through every single major licence with a fine toothcomb and threw out those that hadn’t been properly awarded – Nick von Schirnding

The administration is doing its best to clean up various practices and set the country on a new course, says Nick von Schirnding, director and executive chairperson of Arc Minerals. “But changing a supertanker takes time.”

Investor perception also takes time to change, and the dubious way in which mining and exploration licences were acquired under the Lungu presidency could still deter investors. Also, under previous presidencies, mining rights were at times taken away. “This can put investors off. Once bitten, twice shy,” said one mining executive who asked to remain anonymous.

The best thing Zambia can do for its investor community is secure a stable policy environment, even though its taxes are some of the highest in the world.

Peter Leon, partner and Africa chairperson at Herbert Smith Freehills, said the country’s debt issues have not been a significant deterrent for would-be investors, but rather its ever-changing royalty rates, which needs to be fixed.

Leon’s view is that Zambia’s mineral legislation is sound, the government is committed to good governance and the rule of law, while the country has a lot more policy certainty than South Africa.

Time is of the essence though. There is a question mark over how realistic a three million tons a year copper production target is, says Leon. He also notes that Hichilema has two years left in office and if the economy hasn’t grown as he has promised he might not be re-elected, although Zambia’s recent debt deal is just what is needed.

A rosy future?

The good news is that, after lengthy negotiations that lasted close to three years, Zambia finally secured a deal on 22 June to restructure its more than $6bn debt. In terms of the restructuring agreement, Zambia’s debt will be rearranged over more than 20 years with a three-year grace period during which only payments on interest are due, Reuters reports. The agreement with its official creditors means the country will receive a $188 million loan from the International Monetary Fund as part of a $1.3bn package that was approved in August 2022.

There are also indications that the long-standing issues with Konkola and Mopani respectively will be resolved by the end of 2023. An insider close to the process said an agreement between Vedanta and Zambia Consolidated Copper Mines, which is 77%-government-owned, is imminent on Konkola. “In government we’re saying: ‘You can’t mine in the courts.’ You have to be pragmatic. The negotiations have been difficult, but the intention is to reach an agreement by the end of the year.”

Konkola currently produces less than 100,000 tons of copper a year, because of a lack of investment. But once a deal has been concluded, the Konkola Deep Mining Project, which has a nameplate capacity of 300,000 tons a year, can be initiated.

With Mopani the process is less complicated, and the Zambian government is currently in possession of bids from four shortlisted potential buyers: China’s Zijin Mining and Norinco Group, Sibanye- Stillwater, and an investment vehicle owned by former Glencore employees. A final bid will take place in mid-July and a deal is expected to be in place in October this year. Mopani’s production is currently around 80,000 tons a year – a far cry from its potential 225,000 tons.

“We have seen similar moves in Botswana and Namibia towards transparency through a public mining cadastre — and even some movement in South Africa in this direction. So Zambia’s success in rolling out this facility certainly seems to be having a positive effect across the region — Desmond Mossop, SRK.

Both Konkola and Mopani are in the fortunate position that they’re not resource-constrained and with more investment, production could be ramped up.

With the clean-up of Zambia’s mining cadastral portal completed, the country is well-positioned to attract new investment, says Courage. “The queues outside the cadastre office stretched around the block.”

“We have seen similar moves in Botswana and Namibia towards transparency through a public mining cadastre — and even some movement in South Africa in this direction,” says SRK Consulting partner Desmond Mossop. “So Zambia’s success in rolling out this facility certainly seems to be having a positive effect across the region.”

Von Schirnding says he is thoroughly impressed with the speed with which the Zambian government is turning things around. “The mining cadastre was subject to a detailed audit over eight months. They went through every single major licence with a fine toothcomb and threw out those that hadn’t been properly awarded. They replaced almost the entire staff complement of that office. It’s real proof that there’s a desire to change.”

Zambia and the DRC’s plans for collaboration on electric vehicle battery production are also gaining momentum, with the US and Afreximbank “waiting in the wings” to provide concessional funding. Feasibility studies are being conducted to establish two special economic zones for battery manufacturing purposes, Courage adds.

“Many of the world’s largest mining companies like what they hear from Hichilema. They see a government that understands the needs of investors. The president recognises the opportunity to capitalise on the surging demand for copper,” says Courage.

Hichilema is a breath of fresh air, says Von Schirnding. “The government is being very sensible and proactive. When you operate in any jurisdiction you need an established mining framework which governs the awarding of licences and mining regulations. The second thing is you need the rule of law that will enforce those regulations. Those are the key building blocks when entering into any country.”

This article originally appeared on Mining MX.

Vedanta to Resume Production at Konkola Copper Mines with $1 Billion of New Investment

Zambia’s government has agreed a deal that will return ownership of the Konkola Copper Mines (KCM) to Vedanta, four years after the group left the mine, as part of new initiatives to drive massive growth in the mining sector.

In 2019, then-President Edgar Lungu’s pursuit of nationalised mining involved seizing control of KCM from Vedanta, with the Popular Front (PF) government using its 20 per cent stake in the mine to place KCM in provisional liquidation.

Vedanta launched a legal battle, and KCM struggled under state control. Incentives under PF rule such as royalty increases, double taxation and import levies thoroughly undermined the profitability of the Zambian mining sector. As opposition presidential candidate, Hakainde Hichilema assured voters he would restore the major contribution Zambia’s mines had once made to the economy.

Edgar Lungu lost his bid for re-election in 2021 to opposition leader Hakainde Hichilema and his UPND ‘New Dawn’ party. It was reported in June 2022 that President Hichilema’s government was looking for a new investor in KCM and other major mines, as part of efforts to reanimate the copper sector.

Minister of Mines and Minerals Development Paul Kabuswe said in November 2022 that any solution for KCM would have to involve Vedanta. Last Friday, Kabuswe told reporters that he was “counting days, it’s no longer months”, referring to the return of Vedanta.

With KCM back under its ownership, Vedanta is pledging investments totalling $1 billion over five years to revive the site, a key clause in the government’s conditional agreement with Vedanta.

Copper at the Vedanta KCM warehouse. (Bloomberg)

Vedanta will also finance payments totalling $250 million to local creditors of the mine, in order to restore its majority state. The group will also increase KCM mineworker salaries by 20%, and issue a one-time payment of K2,500 to each mineworker.

Announcing the deal, Mines Minister Paul Kabuswe said, “Vedanta will return to run and resuscitate the operations of KCM as the majority shareholders”.

Anil Agarwal, Vedanta’s owner, said that the goal of the mining company would be to “become a fully integrated producer of copper and cater to India’s fast-growing demand while also making Zambia the leading producer of copper in the world”. Vedanta has pledged to double annual production to 100,000 tonnes, with the goal of reaching 200,000 tonnes as quickly as possible.

Zambia is currently the second-largest producer of copper in Africa, and the seventh largest in the world. Its ore deposits are among the highest quality and largest in the world. Many of its deposits have yet to be mined, owing to historical largely open pit mining not affecting deeper veins of copper ore.

Zambia’s copper offers opportunity for new mining innovation and investment as the green energy revolution continues to gain pace. Demand for copper, as a conductive metal present in almost all electrical components, is increasing at an unprecedented rate. It is estimated that the global copper industry needs to invest more than $100 billion in mines to match the world’s annual supply by 2030, a major opportunity for copper-rich nations such as Zambia.

Zambian copper ore. (Copperbelt Katanga Mining)

Looking to capitalise on copper demand, the government has committed to enormous increases in output, as a strategy to rapidly develop Zambia’s economy through increased export trade and local employment. President Hichilema has set Zambia the target of more than tripling its copper production over the space of a decade.

Zambia, which produced 800,000 tonnes of copper last year, aims to be producing more than 3 million tonnes by 2032. Kabuswe and the Mining Ministry have brokered a series of contracts designed both to achieve this goal while enriching local populations.

Canadian-based mining company Barrick Gold raised the classification of Zambia’s Lumwana copper mine to ‘Tier One’, signifying reserves of more than 5 million tonnes, in July 2023, after investing more than $4.3 billion into its Zambian sites.

British firm Moxico Resources committed $100 million to expanding the Mimbula Minerals copper leaching plant this March, creating 900 new jobs and maximising the efficiency of some of Zambia’s largest mines in the process. Mimbula is expecting to increase its extraction rate by more than five times its current output.

In December 2022, President Hichilema announced an agreement worth $150 million with KoBold Metals, a US-based artificial intelligence firm, to explore and develop the vast underground deposits of Mingomba mines, estimated to contain 246 million tonnes of copper and cobalt ore at a grade six times higher than that found in Chile, currently the world’s top copper producing nation.

Mingomba copper mine, where KoBold metals has begun to explore underground deposits. (Mining for Zambia)

Zambia is not just expanding its contribution to the green revolution; the country has also been brokering bilateral deals to accelerate its own transition to renewable energy. These deals intend to expand and diversify the renewable energy self-sufficiency of Zambia, which currently relies on hydropower for 80% of its energy.

In February, President Hichilema and a UK energy commission finalised a $2 billion green energy joint ventures agreement, designed to drive sustainable economic growth, known as the Green Growth Compact. Two months later, Abu Dhabi renewable energy firm Masdar signed a joint venture agreement with ZESCO, Zambia’s state owned power company, to develop solar energy capacity worth $2 billion in Zambia.

President Hichilema’s Top 5 Economic Achievements

Hakainde Hichilema took the oath of office as Zambia's seventh president two years ago on August 24, 2021. Following a decade under the rule of Edgar Lungu’s Patriotic Front Zambia's economic and democratic standings had deteriorated considerably. The PF government had defaulted on its Eurobond debts in November 2020 (becoming the first country do so during the Covid-19 pandemic); corruption was widespread and the opportunities for democratic expression had been savagely curtailed. Hichilema’s win was, therefore, embraced by many Zambians as a ‘New Dawn’: an opportunity for economic recovery and to restore democratic ideals. 

As the two-year anniversary of Hichilema being sworn in passes, how has the president and his government increased the stability of Zambia and promoted the country and its citizens to global investors? 

This article looks back on Hichilema’s defining achievements in reforming and improving Zambia’s economic status. 

5. Closer Engagement with the Private Sector. 

The private sector generates jobs and income and plays a vital role in delivering infrastructure and social services for Zambia. However, when Hichilema entered office in 2021 Zambia’s investment landscape was perceived as largely unstable. Hichilema and his government have since worked tirelessly to assist the growth and development of the private sector. 

In April 2022, the government unveiled the Public-Private Dialogue Forum (PPDF). This innovative conference mechanism has enhanced the role of the private sector within Zambia, accelerating economic advancement. The PPDF works by promoting collaboration between stakeholders and private sector companies. 

Patrick Kangwa, Secretary to the Cabinet, emphasised how Zambia's private sector was being held back from its potential as a pivotal driver of economic advancement and how the forum acts to remedy private sector limitations through the systematic identification of constraints in Zambia’s market. 

Since PPDF’s debut, the forum has introduced a National Arts Policy which provides creative infrastructure through nationwide centres such as the Lusaka Arts Contemporary Centre, to promote Zambia’s global artistic standing. Additionally, the forum has acquired US$1.3 billion for Zambia’s health sector for the period 2023 to 2025, enabling Zambia to carry out internationally ground-breaking research in the fields of sexual reproductive health, HIV and AIDS and mother and child health. 

In March 2023, President Hichilema again tightened cooperation between the private and public sectors by creating the Presidential Delivery Unit (PDU). 

The PDU works with existing resources in an accelerated manner, through strategic prioritisation of specific economic value streams. This optimises workflow by removing operational and logistical delays that have previously impeded progress. 

Since entering office, the New Dawn government has frequently collaborated with global economic forces to improve the private sector. Notably, the government hosted forums with the European Union and China last year, in May and October respectively, to encourage investment and trade opportunities in Zambia.   

As a result of these forums, the EU invested €110 million to advance education, health, and green energy in Zambia in 2022. Likewise, more than 600 Chinese businesses invested over US$3 billion in Zambia, increasing the bilateral trade volume between the two countries to $3.76 billion in the first half of 2022 - up nearly 40% compared to the previous year under Lungu’s administration. 

 4. Bolstering investment in the mining sector  

Mining is a crucial engine for Zambia’s economy, with copper trade alone accounting for over 60% of the country’s exports. President Hichilema has the clear objective of increasing the country's copper production. His goal is to triple the current output, which means expanding it from 800,000 tonnes per year to 3 million tonnes within a decade. 

In 2023, Hichilema’s consistent work towards repairing global trust in Zambia’s mining industry manifested in two major investments from companies which previously held doubts about the stability of the market.  

In July, Vedanta Resources regained control of Zambia's Konkola Copper Mines (KCM) signalling a restored partnership between the Zambian government and Vedanta after the relationship broke down under Lungu’s administration which culminated in a state take-over of the KCM assets and forced liquidation in May 2019. Vedanta has promised to increase investment and execute new social responsibility programmes. 

Similarly, Barrick Gold announced in 2022 that it will be transforming Zambia’s Lumwana copper mine into a Tier One asset, a move which will significantly help the government to reach their target of 3 million tonnes. Amazingly, this increased investment comes after the gold giant prepared to sell the copper mine in 2019 due to tax changes under PF’s government. In an interview discussing the mine, Barrick president and chief executive, Mark Bristow, stated that “We all agree that President HH has brought a certain stability to the country, he has definitely made the country more investable”, a comment which emphasises a renewed global faith in Zambia’s economy and government.   

On top of restoring and improving previous partnerships, Hichilema has attracted new business partners to the mining sector who have bought innovative new technology to Zambia. In July this year, the Silicon Valley start-up KoBold Metals embarked on a $150 million exploration project in Chililabombwe. 

The company employs pioneering artificial intelligence technology to guide drill placement. KoBold's investors include Breakthrough Energy Ventures, a climate and technology fund co-founded by Microsoft's Bill Gates and backed by Amazon's Jeff Bezos and Virgin's Richard Branson, reflecting a trend of non-traditional mining investors addressing the global copper shortage driven by a transition to cleaner energy sources. 

3. First Quantum Minerals Deal 

Out of Hichilema’s mining successes, the most significant deals from his time in office are undoubtedly with First Quantum Minerals (FQM), a global mining company with operations in nickel, gold, and cobalt. 

In July, FQM officially commenced production at their Enterprise nickel mine situated in the Zambia’s North-western Province. The mine is expected to upscale annual production to nearly 30,000 tonnes of nickel over the next two years, making Zambia the continent's largest producer of the metal used in making batteries for electric vehicles, the company told reporters. 

Furthermore, FQM have publicly acknowledged Hichilema’s efforts to restore the stability of Zambian investment, with the company attributing their $1.25 billion expansion at Kansanshi Copper Mine to a “renewed confidence” in Zambia's economic climate due to the governance of Hichilema and his party. 

Subsequently, the Kansanshi mine has emerged as the largest copper producer in Africa, contributing significantly to the socio-economic landscape by generating over 13,000 jobs for the local Zambian populace. As part of its commitment to the community, FQM is also providing 6,000 free school lunches and protecting nearby wildlife reserves. 

These increases will soon make Zambia the largest producer of the metals needed to manufacture batteries for electrical vehicles, a prospect which aligns with the government’s intention to become a major player in the emerging market of EV batteries. 

2. Powering an electric future 

The International Energy Agency anticipates that the demand for lithium will be forty times higher, graphite twenty-five times higher, and nickel and cobalt approximately twenty times higher in 2040 than in their respective levels during 2020. This will primarily be driven by the manufacturing of clean energy technologies, such as batteries for electric vehicles (EVs). Zambia, as a leading producer of critical metals, has entered into an official partnership with neighbouring Democratic Republic of Congo (DRC) to bolster and elevate the EV industries of both nations. 

 Last year, the United Sates signed a memorandum of understanding (MoU) with DRC and Zambia to strengthen electric vehicle battery value chains. The MoU affirms the US’ commitment to upholding the United Nations’ standards for preventing, detecting, and addressing corruption at every stage of the supply chain. 

Development continued this year in April when African Export-Import Bank (Afreximbank) and the United Nations Economic Commission for Africa (ECA) signed a framework agreement with DRC and Zambia for the establishment of special economic zones for the production of electric vehicles and batteries as the continent looks to add value to surging demand for its critical minerals.  

Zambia’s cooperation with DRC is important as the two countries have major reserves of some of the critical minerals needed to produce batteries for electric vehicles and other technologies key to the green energy transition. The DRC accounts for approximately 70% of global cobalt supply and 88% of cobalt exports. Together, the two countries hold 11% of the world’s copper, as well as significant reserves of lithium.  

To date Zambia and the DRC have largely served as exporters of these critical raw materials to foreign manufacturers. Now however, Afreximbank and ECA will lead the establishment of an operating company in consortium with public and private investors and Afreximbank’s impact fund subsidiary, the Fund for Export Development in Africa. This new company will develop facilities dedicated to the production of battery precursors, batteries, and electric vehicles within special economic zones in Zambia and the DRC. This will ensure a shorter supply chain for businesses and more, better paying jobs for the people living nearby.   

1. ‘Historic’ Restructuring of Zambian Debt

The heavy impact of high interest loans acquired by President Lungu’s government has so far constrained Hichilema’s ability to develop social programs and crucial infrastructure, which are key factors driving economic growth. By restructuring its Eurobond debt, the New Dawn government has reduced the burden of debt repayment, allowing it to reimburse creditors over an extended period or with reduced interest rates.  

In June, the government of Zambia confirmed that an accord had been reached with its official creditors for the restructuring of a total of USD 6.3 billion in loans. The terms of the arrangement entail the implementation of a three-year grace period, during which only interest payments will be required, alongside an extension of the loan maturities to a duration exceeding 20 years. The deal was hailed by French President Emmanuel Macron as ‘historic’. 

The debt restructuring has eased Zambia’s debt service burden and has the potential to significantly enhance the country’s monetary and fiscal stability and help revive capital inflows. 

Following Zambia's successful negotiations with bilateral creditors to restructure debt in June, the country returned to the process of bond restructuring, this time with 15 European and U.S.-based institutions who collectively held around 45% of Zambia's Eurobonds. 

This restructuring allows the Zambian government more fiscal space to operate in and increases the reserves available to invest in crucial developments and social expenditure. This increased budget directly contributes to the lives of Zambian citizens with advancements in transport, agriculture, and health, all improving the country’s economic landscape, and therefore enabling more people to rise above the poverty line. Moreover, small and medium businesses in Zambia are granted greater accessibility to venture capital funding, resulting in higher levels of Zambian profit. 

Zambia Investor Briefing: August 2023

OVERVIEW

•    President Hichilema visited Israel at the start of this month, the third such trip by a Zambian head of state in the past decade. The President met with both Israeli Prime Minister Benjamin Netanyahu and President Herzog to discuss trade, peace and security between the two countries. Herzog labelled relations “outstanding”. Hichilema attended the Israel-Zambia Business Forum in Jerusalem, which focused on opportunities in Zambia’s agricultural sector.

•    UK Foreign Secretary James Cleverly was welcomed to State House, marking the first such visit in more than 30 years. The Foreign Secretary announced the expansion of the UK’s clean energy partnership with Zambia, which includes up to GBP 2.5 billion worth of British investment in Zambia’s mining, minerals, and renewable energy sectors, in addition to GBP 500 million in British government-backed investments.

•    The World Bank’s Country Director for Malawi, Tanzania, Zambia and Zimbabwe met with President Hichilema as part of a broader visit to the country. Nathan Belete held meetings with the ministers for tourism, trade, finance, and infrastructure, in addition to his time with the President.

•    Mines and Mineral Development Minister Paul Kabuswe signed a joint declaration with Japan’s Economy, Trade and Industry Minister Yasutoshi Nishimura in order to strengthen cooperation in the mining sector. The two countries have agreed to expand cooperation in the exploration of minerals via satellite, particularly copper, cobalt and nickel, which are essential for electric vehicles and other products.

•    The outgoing European Union Ambassador to Zambia, Dr Jacek Jankowski, has told President Hichilema at his final official press conference at State House that his efforts are “really highly appreciated by the European Union”, and described Zambia as an “amazing country”. Hichilema thanked the EU for the part it has played in strengthening Zambia’s democratic practices. Dr Jankowski leaves his post after serving the EU in Zambia for four years.

•    President Hichilema attended the BRICS Summit in Johannesburg last week in his capacity as Chairperson of the Common Market for Eastern and Southern Africa (COMESA). There, he participated in the Round Table Discussion themed “Promoting African Integration and Jointly Building a High-Level Africa-China Community with a Shared Future”. In a statement, Hichilema called on the Summit “to serve as a stepping stone to enhance coordination between BRICS and Africa, enabling an effective response to our global social, political, economic, and environmental challenges”.

•    Talks are ongoing concerning the new core investor for Mopani Copper Mines. Johannesburg-based precious metals producer Sibanye Stillwater has recently announced its plans to bring in a Chinese investor to form a partnership if it wins its bid. The unnamed Chinese company already has a presence in copper mining. Also on the shortlist for the mines is China’s Zijin Mining Group.

President Hakainde Hichilema’s Visit to Israel

President Hichilema visited Israel at the start of this month on a three-day trip, the third such trip by a Zambian head of state in the past decade. The President met with both Israeli Prime Minister Benjamin Netanyahu and President Herzog to discuss trade, peace and security between the two countries. Herzog labelled relations between the two countries “outstanding”.

During the trip, Zambia’s Foreign Minister Stanley Kakubo met with Israel’s Foreign Minister Eli Cohen to discuss Israel’s relations with Africa in general and Zambia in particular. The two signed a framework agreement to strengthen cooperation in medicine, communication, agriculture, and culture.

Hichilema attended the Israel-Zambia Business Forum at Israel’s Ministry of Foreign Affairs, Jerusalem. With a focus on opportunities in the agricultural sector, the delegates explored issues such as water harvesting and irrigation in Zambia.

During his trip, Hichilema also finalised negotiations regarding a $100 million investment in a renewable energy power station in Chibombo, Zambia by Israel’s Gigawatt Global and Gigawatt Wind. The companies now have an Investment License with the Zambia Development Agency (ZDA) and an Implementation Agreement with the Energy Ministry. Gigawatt Global president Yosef Abramowitz described it as “the most significant private Israeli investment in the Zambian economy”.

Britain Agrees Deals with Zambia on Clean Energy and Critical Minerals

Britain’s Foreign Minister James Cleverly conducted a four-day visit to Zambia at the beginning of this month in order to deepen ties between the two countries. It was the first such visit in more than 30 years.

The UK’s Foreign Secretary announced the expansion of its clean energy partnership with Zambia (including a UK-Zambia Green Growth Compact), which includes up to GBP 2.5 billion worth of British investment in Zambia’s mining, minerals, and renewable energy sectors, in addition to GBP 500 million in British government-backed investments.

During his visit to the country, Cleverly toured the Mimbula Copper Mine, where British company Moxico Resources will invest an additional USD $210 million of private sector funding to expand production at the site. He also signed a Memorandum of Understanding (MoU) on critical minerals, laying the foundation for further UK support for the responsible mining of copper, cobalt, and other minerals fundamental to the clean energy transition.

Cleverly said of the agreement, “The UK-Zambia Green Growth Compact and our landmark agreement on critical minerals will support investment between UK and Zambian business, creating jobs in both countries”.

OTHER NEWS

Indebted nations can learn from Zambia’s breakthrough debt deal 01.08.23, The Africa Report

The developing country with a positive trajectory 02.08.23, World Finance

EG Capital welcomes Prosper Africa Catalytic Investment Facility and USAID as new partners is EG-Economic Empowerment Fund 10.08.23, African Business

Zambia’s plan to dig its way out of debt with a copper revival 13.08.23, Financial Times

What a US-DRC-Zambia electric vehicle batteries deal reveals about the new US approach towards Africa 21.08.23, Carnegie Endowment for International Peace

Billionaire Agarwal pledges to pay Zambia creditors before retaking mine 23.08.23, Bloomberg

Sibanye brings in Chinese partner for Mopani Copper Mines bid 29.08.23, Reuters 

UPCOMING EVENTS

 07.09.23 - Zambia ESG and Sustainable Finance Summit 2023

Livingstone, Zambia

28.09.23 - AfBC: UK-Africa Trade and Investment Summit 2023

London, UK

Sibanye-Stillwater saddles up with Chinese in bid for Mopani Copper

SIBANYE-Stillwater CEO Neal Froneman said he rated his firm’s chances of bidding successfully for Zambia’s Mopani Copper after jointly submitting an offer with a “substantial Chinese copper company”.

“I do think we can involve eastern partners and help resolve a conflict Zambia is dealing with between east and west,” said Froneman in an interview. “Zambia did not request it.”

A decision from Mopani’s current owner, the state-owned ZCCM-IH, was about “two to three weeks away” after which the successful bidder would begin negotiations on a long-term fiscal regime, royalties and a stability agreement, said Froneman.

“One competitive edge is that we can be a bridge between east and west,” said Froneman. “China has spent a lot of money in Zambia and it would be difficult for the government to exclude them. That was one consideration,” he said.

“The other is that we have knowledge of deep-level, labour-intensive mining, and work with communities that are centered around a mine. It is completely different type of community to, say, in the US.”

Bidding has been whittled down from about four or five companies to Sibanye-Stillwater and its partner, and China’s Zijin Mining, he said.

Froneman said that if the bid was successful the partners would embark on a capital reinvestment programme of the asset. But shareholders should not expect ” a large, upfront capital outlay”.

Froneman also raised the prospect of investing in other assets in Africa without sacrificing the company’s strategic intention of diversifying its political risk. “Africa has critical minerals and is under-explored. Not all of Africa fits the bill but Zambia and Botswana do have good perceptions,” he said.

Commenting on merger and acquisition activity broadly, Froneman said the company preferred to invest at the asset level where it didn’t “get sucked into a competitive bidding process”.

Froneman earlier presented Sibanye-Stillwater’s interim results for the six months ended June 30 in which platinum group metal and nickel production declines combined with heavy PGM price declines resulted in a 36% decline in profit to R7.8bn.

However, the company announced it would pay a 53 South African cents per share interim dividend, equal to 35% of normalised earnings – the upper end of its dividend policy. Despite this, Froneman said the company’s board would revisit the dividend policy when it met to decide the final payout for the 2023 financial year.

“We pride ourselves on paying an industry-leading dividend but 3% is not industry leading,” he said of the interim payout. “We can pay out 50% of normalised earnings but the board has to meet to decide it,” he said.

This article originally appeared on Miningmx