Zambia to Introduce Local Content Law for Mining Sector

Zambia is set to introduce a “Local Content” law this year, requiring mining companies to prioritize local contractors and suppliers when awarding contracts.

The Citizens Economic Empowerment (Reservation of Goods and Services in the Mining Sector) Regulations aim to boost Zambian businesses by setting a threshold for contracts exclusively reserved for Zambian citizens.

Mines Minister Paul Kabuswe announced the development ahead of the African Mining Indaba in Cape Town, South Africa, stating that stakeholder consultations on the draft framework are ongoing and the law will be enacted this year.

“Once we have reached a consensus with all key stakeholders, we are committed to finalizing and implementing the regulations,” Kabuswe said.

The initial draft proposed that mining contracts valued at ZMK30 million or below be exclusively awarded to Zambian-owned companies, ensuring local participation in the industry.

However, some industry players have raised concerns, arguing that the policy could slow down mining operations as local businesses may take time to build capacity. Others have suggested that the law should extend beyond mining to other industries for broader economic impact.

To address capacity challenges, the draft regulations propose that:

• Mining contracts be divided into smaller lots to enable citizen-owned companies to compete.
• Local companies form partnerships to meet contract requirements.
• Mining firms allocate 0.5% of their annual procurement of non-core goods and services to the local communities where they operate.

While the proposed law presents a significant opportunity for Zambian businesses, successful implementation will require extensive stakeholder engagement, including financial institutions that can support local contractors and suppliers.

If effectively executed, this policy could catalyze economic empowerment for Zambians, though careful planning will be essential in the early stages.