Kansanshi’s Golden Thread: How Zambia’s Largest Copper Mine Became a Pillar of National Gold Reserves

In the heart of Zambia’s North-Western Province, Kansanshi Mine towers as a copper giant — but it is gold that increasingly shines in the national conversation.

For nearly two decades, Kansanshi Mine has produced gold as a copper by-product, pouring it into bars that have become a cornerstone of Zambia’s national reserves through the Bank of Zambia (BOZ).

While Kansanshi’s processing plants are optimized for copper output, the gold extracted now stands at the center of national economic strategy, contributing to Zambia’s reserves, bolstering the kwacha, and attracting high-value global investment.

This strategic role in Zambia’s economy was underscored again on 7 August 2025, when Kansanshi Mining Plc renewed its agreement with the BOZ to continue supplying gold doré for the next three years.

The deal builds on a relationship dating back to 2021 and reflects a growing recognition — both at home and abroad — that Kansanshi’s gold has a role to play far beyond the mine’s fence.

From Copper Giant to Gold Producer

Kansanshi’s gold journey began long before First Quantum invested in the mine. Artisanal miners had been recovering small quantities of the precious metal from the region’s deposits since the early 1990s.

In 2005, when First Quantum commissioned full-scale operations at Kansanshi, gold recovery was integrated into the copper processing circuit, transforming it into a modern, large-scale by-product commodity.

Today, Kansanshi produces gold doré bars — semi-refined gold containing between 94% and 97% purity. Under the contract, the Bank of Zambia takes possession of the gold while on Kansanshi’s premises.

These bars are later refined to 99.995% purity and exported under strict government oversight, in compliance with Ministry of Mines and Minerals Development (MMMD) regulations, Zambia Revenue Authority (ZRA) requirements, and customs laws.

Gold at Kansanshi moves under a security and compliance framework that could rival a central bank vault.
The process involves five government agencies: ZRA, MMMD, the Office of the President – Special Division (OP-SD), the Zambia Air Force (ZAF), and the Zambia Police.

The protocol is precise:
Day before shipment:

• Agencies witness product inspection.
• They verify the weight of each doré bar.

Day of shipment:

• Agencies oversee final packaging and sealing.
• They supervise loading at the Kansanshi Gold Plant.
• The shipment is escorted all the way to its point of dispatch.

This multi-agency presence ensures transparency, prevents illegal exports, and reinforces Zambia’s control over one of its most valuable resources.

Gold for National Reserves

In 2021, Kansanshi’s gold became central to a national strategy when FIRST QUANTUM signed its first agreement with the BOZ.
The aim: to purchase locally produced gold for Zambia’s reserves and enhance macroeconomic resilience.

Since the start of that agreement, BOZ has purchased 92,100 ounces of refined gold from Kansanshi — the equivalent of 2.8 metric tonnes — representing 61% of the mine’s total doré output over the period.

The price is set according to the London Bullion Market Association (LBMA) rate, with payment made in kwacha at the BOZ mid-rate.

This structure not only secures fair market value for FIRST QUANTUM but also keeps foreign exchange inside Zambia’s borders.

The economic benefits are multifaceted:

• Reduces dependence on foreign currency reserves.
• Supports the kwacha and investor confidence.
• Provides a hedge against inflation.
• Strengthens Zambia’s global financial reputation.
• Ensures a portion of Zambia’s gold remains within the country.

When the original three-year contract expired in December 2024, BOZ initiated a competitive tender.
FIRST QUANTUM’s Kansanshi Mining Plc secured the renewal, signing a new three-year agreement to continue the gold supply.

BOZ Governor Dr. Denny H. Kalyalya praised this ongoing partnership:

“We look forward to buying more gold from your esteemed firm. We have so far purchased about 2.8 metric tonnes of refined gold, and we aim for even greater reserves.”

Under the renewed agreement, the amount of gold sold will be agreed quarterly, based on Kansanshi’s anticipated production and kwacha requirements.
FIRST QUANTUM expects to produce 100,000–110,000 ounces of gold at Kansanshi this year, ensuring a steady supply.

Royal Gold Streaming Agreement

A few days before the renewal of the gold supply agreement with BOZ, FIRST QUANTUM unveiled another major development — a $1 billion streaming agreement with Royal Gold Inc., a US-based precious metals investment company.
The deal is one of the largest of its kind globally in the past decade and further cements Zambia’s position as an attractive mining investment jurisdiction.

Key terms of the Royal Gold agreement include:

• A $1 billion upfront payment to FIRST QUANTUM in exchange for gold credits tied to Kansanshi’s copper production.
• No physical gold from Kansanshi will be delivered to Royal Gold until a later stage; all physical production remains under FIRST QUANTUM’s control.
• Zambia’s taxes, royalties, and other revenues remain unaffected.
• The agreement spans the life of the mine, ensuring long-term financial stability.
• Royal Gold will contribute $4.5 million to social and community projects over the mine’s operational life.

FIRST QUANTUM Country Manager, Dr. Godwin Beene, addressed concerns about meeting both commitments:

“Kansanshi has enough gold doré; we will meet the requirements of both entities as the commissioning of the S3 Expansion guarantees a steady input of gold-bearing ore into the concentrator. As far as production is concerned, there’s no cause for worry.”

Dr. Beene further emphasized the national benefit of Kansanshi’s gold output:

“The benefit of this arrangement is that a good percentage of the gold stays in the country. It will support Zambia’s treasury and benefit the nation at large — not just our immediate communities.”

Meanwhile, FIRST QUANTUM Country Director Anthony Mukutuma highlighted the deal with Royal Gold Inc. as a statement of confidence:

“This is the largest indirect investment of its kind globally in the last decade and a strong endorsement for continued investment in Zambia.”

The streaming arrangement allows FIRST QUANTUM to maintain full exposure to about 84% of its gold production in 2026 and 2027, while retaining all rights to newly identified near-surface gold zones at Kansanshi.

Two Deals, One Strategy

The BOZ renewal and the Royal Gold streaming agreement may seem like parallel tracks, but together they represent a dual strategy: secure national reserves while attracting long-term foreign investment.

For Zambia, the BOZ agreement means a steady inflow of gold into official reserves.
For FIRST QUANTUM, the Royal Gold deal provides upfront capital for expansion and stability without surrendering physical gold immediately.

Kansanshi’s gold is no longer just a line item in a copper mine’s output report — it is part of Zambia’s financial foundation.
By embedding gold into national reserves and leveraging it to attract major investment, Zambia is positioning itself for greater economic resilience.

Future prospects are promising. The S3 Expansion will boost throughput, as exploration has revealed promising near-surface gold zones that could extend Kansanshi’s gold story well beyond its current life-of-mine plan.

For a mine built on copper, Kansanshi’s golden legacy is proving just as significant. In a world where currencies can weaken and markets can shift overnight, gold remains a universal store of value.
Through careful planning, rigorous oversight, and strategic partnerships, Zambia is ensuring that more of that value stays within its borders.

As BOZ Governor Dr. Kalyalya noted, this is not merely about ounces and contracts — it’s about building “a stronger, more self-reliant national economy.” And in that vision, Kansanshi’s gold is more than a by-product; it is a golden thread woven into the fabric of Zambia’s future.