Outlook of the Investment Climate for Mining in Zambia
A PRESENTATION FOR THE ZAMBIA MINING ROUNDTABLE WORKSHOP
26th June 2013
Hosted by Hon Richard Musukwa, MP, Deputy Minister of Mines, Energy and Water Development, Zambia
Mining On Top: Africa - London Summit
25-26 Jun 2013 | London
Outlook of the Investment Climate for Mining in Zambia
1. A P R E S E N T A T I O N F O R T H E Z A M B I A M I N I N G
R O U N D T A B L E W O R K S H O P
2 6 T H J U N E 2 0 1 3
OUTLOOK OF THE
INVESTMENT CLIMATE FOR
MINING IN ZAMBIA
2. PRESENTATION LAYOUT
Introduction
Government’s Policy on mining
Legal framework for sector
Fiscal regime for the mining industry
Investment opportunities
Infrastructure to support the mining industry
Conclusion
3. INTRODUCTION
Zambia is one of the growing economies in Southern
Africa with vast investment opportunities in mining
Since commencement of commercial mining in
the1930s, mining has been the engine of Zambia’s
economic development
Minerals found in Zambia include base metals,
gemstones, industrial and energy minerals. There are
also indications of potential for oil and gas.
Mining has been dominated by copper and cobalt.
Control of mining has moved from private to state
and private again
5. GOVERNMENT POLICY FOR THE SECTOR
Realising the role private investment plays in the
development of the industry, Zambia has since the 1990s,
pursued a mining policy aimed at ensuring a conducive
environment to encourage private investment in the
exploration and exploitation of minerals.
Through this policy Government aims to ensure the
development of a profitable and sustainable private
sector driven mining industry.
In this setup, the role of Government remains that of
ensuring an enabling environment . My Government is
more than ever committed to providing an excellent
investment climate to ensure continued growth of the
industry.
6. LEGAL FRAMEWORK FOR THE SECTOR
The principal legislation governing the mining industry is
the Mines and Minerals Development Act No. 7 of 2008.
The guiding principle of the Act is Government’s
commitment to the application of modern principles of
transparency and accountability in the management of
mineral resources.
The Act broadly deals with licensing and regulation of
mining activities. The Act provided for establishment of
the computerized mining rights cadastre system to
ensure efficiency in the administration of mining rights.
The Act is under review to make it more responsive to
developments in the industry.
7. FISCAL REGIME FOR THE SECTOR
Fiscal regime for the mining in Zambia is still one
the lowest in the region and includes the following:
i. Corporate tax at 30 percent;
ii. Variable tax of up to 15 percent on taxable
income which is 8 percent of the gross
income;
iii. Mineral royalty at six percent on gross value
on all minerals
8. FISCAL REGIME FOR THE SECTOR
iv. Capital allowance is at 25 percent per
annum.
9. INVESTMENT OPPORTUNITIES
Forty two percent of the country is geologically unmapped at
the scale of 1:100,000. Investing in this area can lead to
exploration opportunities for various minerals.
Tolling Facilities – smelters and refineries. Currently Zambia has
only three major smelters and refineries with a capacity to
produce 750000 tonnes per annum anode copper from 2.3
million tonnes of copper concentrates
With a projected increase in production to 1.1 million tonnes, a
smelter is required in Zambia to treat a million tonnes of excess
copper concentrates.
Precious metal plants for the treatment of refinery slimes
There is a possibility that Zambia could have oil. Exploration for
oil and gas is another area where Government is calling for
investment.
12. INFRASTRUCTURE TO SUPPORT MINING
Inadequate infrastructure (energy and transport) is one
of the factors affecting development of the mining
industry. To address this challenge the Government of
Zambia undertaking a number projects.
With regard to energy, the through the power utility
company Government is undertaking a number of
projects to increase power generation capacity by 1500
megawatts by 2015.
To ensure an efficient transport system that would
reduce cost of doing business in the mining industry, the
Government is working on improving the current railway
network and extending it to other rail lines.
13. CONCLUSION
Zambia is stable investment destination offering vast
investment opportunities ranging from exploration to
value addition. To a serious investor Zambia is generally
a low risk investment destination. Zambia is an
Extractive Industries Transparency Initiative (EITI)
compliant country, an indication that we are committed
to ensuring accountability and transparency in the
management of mineral resources. Accountability and
transparency reduces risks in an investment
environment.
The continued expansion of the mining industry in the
past five years is an indication that the investment
climate in Zambia has continued to improve.