Zambia’s Chamber of Mines Warns of Investor Risks Amid Proposed Mining Reforms

Zambia’s Chamber of Mines has raised concerns over proposed legislative and policy reforms, calling them “an unprecedented threat” to investors’ rights and warning that they could hinder the country’s goal to significantly boost copper production.

The Chamber, which includes major industry players like First Quantum Minerals Ltd. and Barrick Gold Corp., opposes a draft law that would increase state control over certain minerals. It argues that these measures will undermine investor confidence and discourage future investment.

In a statement issued on Tuesday, the Chamber criticized President Hakainde Hichilema’s administration for showing a “serial unwillingness” to consult meaningfully with mining companies.

The Chamber cautioned that the government risks undoing the progress made since 2021 to attract investment. Copper accounts for about 70% of Zambia’s export earnings, making the sector crucial to the country’s economy.

President Hichilema has worked to rebuild trust with mining companies after relations deteriorated under his predecessor due to frequent policy changes.

Zambia, Africa’s second-largest copper producer, aims to quadruple output to 3 million tons by the early 2030s, a significant leap from the 700,000 tons produced last year. Achieving this target will require substantial investment to convert exploration projects into active mines.

The government recently announced plans to create a state-owned company that would control at least 30% of future critical mineral production, including copper. The Chamber argues this move will deter investors, particularly because the state intends to acquire its stake “at no cost.”

Additionally, the proposed overhaul of mining sector governance includes provisions that would give regulators “unaccountable and arbitrary” discretionary powers, which the Chamber warns could lead to corruption.

First Quantum and Barrick subsidiaries were Zambia’s largest copper producers in 2023, accounting for nearly two-thirds of the country’s output, according to government data. Other key players include Vedanta Resources Ltd. and Abu Dhabi’s International Resources Holding.

Mines Minister Paul Kabuswe has not yet responded to requests for comment.