Zambia’s Partnership with FQM Brings Stability to the Nation
In a significant move, Zambia has opted for revenue-sharing in the jointly-owned Kansanshi Mine with global mining company First Quantum Minerals (FQM). This agreement is expected to bring much-needed stability to the Southern African nation’s finances while also ending a long-standing dispute.
Zambia’s holding company, ZCCM-IH, which holds stakes in privately-owned large-scale copper mines, has announced that it will convert its dividend rights in Kansanshi Mine to a 3.1% revenue royalty. First Quantum Minerals (FQM) is the majority owner of Kansanshi Mine, and this move is expected to end a years-long dispute with the Vancouver-based mining giant.
Under the new payment system, royalties will be paid on a quarterly basis for the next 23 years. This long-term arrangement provides a steady stream of revenue for Zambia, helping to shore up its liquidity and providing much-needed financial stability.
The Kansanshi Mine is a crucial source of copper for Zambia, contributing significantly to the country’s economy. However, the mine has been plagued by financial disputes between the government and FQM in recent years, resulting in considerable uncertainty and instability for the country.
By opting for a revenue-sharing agreement, Zambia can now rely on a consistent source of income from the Kansanshi Mine.
