Zambia's proposed minerals regulation law might discourage investment and inflict a "fatal blow" to efforts to increase annual copper output to three million tonnes, according to a media report citing two mining organisations.
Zambia, Africa's second-largest copper producer, is proposing a Minerals Regulation Commission Bill that would enable the government to acquire ownership in exploration regions before granting investors licences to explore for minerals, including copper.
Reuters reports that the proposed bill seeks to grant the minister of finance the authority to maintain ownership of a mining licence on behalf of the government if minerals are discovered.
However, in a joint statement, the Association of Zambian Mineral Exploration Companies (AZMEC) and Zambia's Chamber of Mines (ZCM) said that certain provisions of the proposed law will elevate the perception of investment risk in Zambia.
"Unfortunately, due to . . . the prospect of forced 'free carry' acquisitions by the State of stakes in new ventures, this Bill will seriously undermine property rights," the mining industry bodies said.
"The Bill also grants unaccountable and arbitrary discretionary decision-making powers to individual regulators, which present obvious future corruption risks."
The previous administration's takeover of Konkola Copper Mines from Vedanta in 2019 hurt the country's investment reputation, but President Hakainde Hichilema's 2021-elected administration has worked to improve it and increase copper production.
To capitalise on the increasing demand for copper, which is essential for the worldwide transition to greener energy sources, the new government has returned the firm to Vedanta.
The corporation is targeting increasing copper production to three million tonnes annually within the next decade.
The Zambia Chamber of Mines reported that copper output decreased from 763,500 t in the previous year to 698,500 t in 2023.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
