The government of Zambia through the newly-appointed mines minister has announced plans to restore sanity in the mining sector. According to Paul Kabuswe, the government must root out corruption in mining, which is the engine of Zambia’s economy.
“We may not do everything in the coming budget but I can assure you that sanity will be brought back to the mining sector before 2026,” Kabuswe said.
The mining sector is important in Zambia and is likely to continue to be so. Zambia has a long history of mining and a large known resource base of copper, emeralds and other deposits, as well as good potential for further discoveries given the high degree of prospective.
The mining sector is a major contributor to foreign direct investment, and mining tax revenues contribute a significant portion of total government revenue. The sector is also a significant source of formal employment – both directly and indirectly – which is a result of it being a more mature mining economy. Zambian bonds and the kwacha currency rallied after the election of businessman President Hichilema, who named Kabuswe mines minister.
“We have to make policies that will not disadvantage the investors. We have to have stability in the economy so that the investor is happy,” said Kabuswe.
Africa’s second-largest copper producer, which defaulted on its sovereign debt last year, has benefited from an increase in copper prices to record highs. Kabuswe said Hichilema would oversee Zambia’s policy on Mopani Copper Mines and Konkola Copper Mines (KCM), two critical operations his new administration must tackle.
Zambia took on $1.5-billion in debt to buy Mopani from Glencore in January, and is yet to find a new investor for it. The previous administration handed control of KCM to a provisional liquidator in May 2019, triggering an ongoing legal dispute with its former owner Vedanta.