ZCCM-IH Plans Commodity Trading Arm to Capture Greater Value from Zambia’s Mineral Output
Zambia’s ZCCM-IH to Launch Commodities Trading Strategy and Expand Royalty Model in Copper Sector
ZCCM Investments Holdings (ZCCM-IH) is developing plans to establish a commodities trading function that would allow it to market its share of mineral production directly on international markets, according to Chief Executive Officer Kakenenwa Muyangwa.
The strategy would enable the majority state-owned mining investment company to access physical volumes of output from its portfolio companies in proportion to its equity holdings and sell them independently.
The move is designed to capture greater value as global competition intensifies for critical minerals, particularly copper.
Leveraging Equity Stakes for Market Access
ZCCM-IH holds minority stakes in several major copper operations in Zambia, Africa’s second-largest producer of the metal. These include assets linked to Vedanta Resources, International Resources Holding through Mopani Copper Mines, and First Quantum Minerals.
By trading its attributable share of production, ZCCM-IH aims to strengthen revenue generation and reduce reliance solely on dividend distributions from joint ventures.
Muyangwa indicated that the proposed trading initiative would be separate from the Zambian government’s 2024 partnership with global commodities trader Mercuria, although discussions are ongoing with Mercuria and other market participants regarding possible collaboration frameworks.
Expanding the Royalty Model
In parallel, ZCCM-IH is seeking to expand a royalty-based revenue model across its portfolio. In 2023, the company agreed with First Quantum Minerals to receive a 3.1 percent royalty in place of dividend payments for its 20 percent stake in the Kansanshi mine. The arrangement replaced variable dividend income with more predictable annual royalty flows.
The company is exploring similar structures with China Nonferrous Metal Mining Group and JCHX Mining Management, which owns the Lubambe mine. However, management has indicated that participation in such arrangements would remain voluntary.
At operations controlled by Vedanta’s Konkola Copper Mines and Mopani Copper Mines, ZCCM-IH’s immediate focus remains on stabilizing and increasing production before pursuing additional financial restructuring.
Strategic Shift Amid Critical Minerals Demand
Zambia, alongside the Democratic Republic of Congo, is central to global copper supply. Rising demand for copper in clean energy technologies, electric vehicles and power infrastructure has strengthened the bargaining position of producing countries.
By integrating trading capabilities and expanding royalty mechanisms, ZCCM-IH is positioning itself to capture a larger share of value from Zambia’s mineral output while enhancing revenue stability and financial flexibility.
