Zambia 2024

Mining Report
Third Edition

October 2024 www.pwc.com/zm

Contents
Foreword 3

1. Introduction 4

2. Mining sector facts and figures 5

3. Significant mining sector developments 17

4. The journey to three million tonnes of copper 27

5. Environmental, social and governance 30

6. Conclusion 31

Contributors 32

Appendix 34

Contacts 35
 Foreword
The United Party for National Development (UPND) Government
has maintained a stable policy environment for the mining sector
since coming to power in 2021. This has helped rebuild confidence
in the sector and encouraged new investments in both brownfield
and greenfield projects. In the UPND’s first budget in 2021, the
new Government announced ambitious plans to ramp up copper
production to three million tonnes per annum by 2031. If Zambia is
to meet this target, the Government will need to maintain this
enabling environment and tackle broader issues like the country’s
power deficit so that new and existing mining projects can flourish.

In our 2022 inaugural mining report, we explored the mining

sector’s history so as to understand the factors that have
contributed to the decline in the country’s copper output. Our 2023
report focused on the policy changes that have been implemented
over the years and their impact on the sector. In this report, PwC’s
third mining report, we continue to analyse proposed and actual
Andrew Chibuye changes to policy that affect the sector, along with the associated
risks and benefits.
Country Senior Partner
PwC Zambia I would like to take this opportunity to acknowledge and thank
the following for their input in this report: Dr Hapenga Kabeta,
Permanent Secretary, Ministry of Mines and Mineral Development
and the staff of the ministry; the Ministry of Finance and National
Planning; the Zambia Revenue Authority; the Zambia Development
Agency; the Zambia Statistics Agency; the Bank of Zambia; the
Zambia Extractive Industries Transparency Initiative; the Zambia
Chamber of Mines; Mfikeyi Makayi and the KoBold Metals team;
Norman Mbazima, Anglo Platinum; Dr Sixtus Mulenga, Musamu
Resources; and Anthony Malenga, Country Manager,
Barrick- Lumwana.

I would also like to acknowledge the staff at PwC Zambia who

contributed to the preparation of this report.

We look forward to your feedback.

Zambia 2024 Mining Report - Third Edition PwC | 3

1. Introduction
The mining sector continues to be a cornerstone of Zambia’s economy, contributing significantly to the
country's gross domestic product (GDP), tax revenues and export earnings. This report analyses the sector's
performance in 2023 and where available, up to August 2024, highlighting recent developments and pros-
pects for the sector. In the report, we investigate key policy changes during this time and assess their
potential impact on the sector. Our insights aim to inform stakeholders—policymakers, investors, mining
companies and anyone else with interests in the sector —about the current state and future direction of
Zambia's mining industry.

Zambia has faced significant economic challenges in recent years. Initially, these challenges stemmed from
the country's unsustainable debt burden and the Covid-19 pandemic. Subsequently, geopolitical tensions
and conflicts have exacerbated the situation. Now, the devastating consequences of this year’s
climate-change-induced drought have put further strain on the domestic economy. In addition, there has
been a significant decrease in the mining sector's productivity in recent years, which has also had a negative
impact on economic growth.

Despite this, mining continues to be an essential contributor to the economy and it is expected that the
sector will play a critical role in Zambia's much sought after economic recovery. This expectation is anchored
mainly in the following factors:

● Policy amendments: policies have been amended to make the sector more attractive for investment and
increase the benefits the country and its citizens derive from it.
● Efforts to resolve issues: concerted efforts have been made to resolve significant issues in the sector
that have impeded production.
● Positive prospects for new discoveries: there are positive prospects regarding discoveries of Zambia's
primary mineral, copper, and other minerals, especially those linked to the energy transition.
● Bullish commodity prices: the price of commodities, especially copper, has remained bullish for a
sustained period and is expected to remain elevated for a long time.
● Growth in other key minerals: the output of other vital minerals, such as precious stones, has grown,
contributing to greater diversity of output.

This report is our third annual mining sector report. In our inaugural 2022 edition, we explored the sector's
history to understand the factors that have contributed to a decline in Zambia’s mining output in recent
years. Our 2023 report focused on understanding policy changes and their effect on the sector's outlook. In
this report, we again analyse proposed and actual changes along with the associated risks and benefits.

In preparing our report, we have used data up to December 2023 and, where available, up to August 2024.

Zambia 2024 Mining Report - Third Edition PwC | 4

2. Mining sector facts and figures
Overview of the mining sector in Zambia
The mining sector in Zambia is dominated by copper mining, which makes a disproportionately large
contribution to the industry’s output and the country's economy. Furthermore, a few large mining companies
are responsible for a significant proportion of this copper output. Most of these assets have been in
operation for many years yet remain critical to the sector's fortunes.

The Ministry of Mines and Mineral Development approved 1,840 mining and non-mining rights applications
in the year 2023 through its Mining Licensing Committee. To foster efficiency and transparency in issuing
licenses to potential miners, an online application platform was introduced at the end of 2023. The table
below shows the number of licenses granted by type in 2022 and 2023:

Table 1: Licenses granted by type in 2022 and 2023

S/NO Description 2022 2023

1 Artisanal mining rights (AMR) 34 275

2 Small scale exploration licenses (SEL) 70 365

3 Large scale exploration licenses (LEL) 79 380

4 Small scale mining licenses (SML) 5 56

5 Large scale mining licenses (LML) 1 10

6 Mineral processing licenses (MPL) 1 25

Total 190 1111

Source: Ministry of Mines and Mineral Development 2023 Annual Report

The table above shows that, all being equal, mining activities will increase in the coming years.
Ministry of Mines and Mineral Development 2023 Annual Report.

Zambia 2024 Mining Report - Third Edition PwC | 5

There has been a significant push by the Government to increase output by the mining sector since the
UPND came into power in 2021. Most notably, the government announced in its first budget that year, its
ambitious target of increasing copper production from around 800,000 metric tonnes a year (at that time) to
three million metric tonnes by 2031. The Government said achieving this target depends on factors such as
increased output from existing mines, resolving legacy issues that have dampened production at certain
mines, promoting the discovery of new assets, and increasing the contribution of small-scale and artisanal
miners.

The production of other minerals, such as precious metals and gemstones, as well as minerals needed for
the energy transition, such as lithium, manganese and cobalt, is expected to increase as exploration is
intensified.

The next section analyses the most fundamental aspects of the sector's performance and overall economic
contribution.

2.1 Overall mining sector contribution to Zambia's GDP

According to the Ministry of Finance and National Planning, the mining sector's contribution to GDP in
2023 was 13.7% compared to 12.9% in 2022. In the first quarter of 2024, the sector contributed 15.6% to
Zambia's total economic output. Mining ranked as the second largest contributor to Zambia’s GDP in 2023
and in the first quarter of 2024. Within the mining sector, GDP contracted by 5.9% in 2023, but the sector
grew by 9.6% in the first quarter of 2024. Since 2012, mining's contribution as a percentage of Zambia's
GDP has ranged between 11% and 19%, with the peak of 19% recorded in 2021.1

In 2024, the sector's performance is anticipated to improve, driven by increased production and ongoing
efforts to resolve operational challenges at critical mining operations, such as Konkola Copper Mines.
Production at Konkola has fallen sharply since it was placed under liquidation in 2019 following an
application by ZCCM-IH. In September 2023, the company was returned to its majority owner, Vedanta
Resources, on condition that the Indian company invest some US$1.2 billion in Konkola’s operations, and a
ramp up in production is expected soon.

Figure 1: 2023 Sector contrubution to real GDP - %

Power BI Desktop

Wholesale & Retail Trade (K106bn) 0.3

Mining and Qaurrying (K78bn) -5.9

Construction (K70bn) 9.3

Transport and Storage (K64bn) 8.5

Manufacturing (K47bn) 1.9

Financial Service (K41bn) 13.5

Public Admin and Defence (K28bn) 0.2

Education (K17bn) 15.4

Agriculture (K16bn) -15.9

ICT (K15bn) 28.8

-10 0 10 20 30

Source : Ministry of Finance and National Planning 2023 Annual Economic Report.

1
Ministry of Finance and National Planning 2023 Annual Economic Report.

Zambia 2024 Mining Report - Third Edition PwC | 6

Figure 2 : Mining Sector Contribution to GDP K’million
Power BI Desktop

19%
0.5M
NOMINAL GDP and SECTOR CONTRIBUTION TO NOMINAL GDP

SECTOR CONTRIBUTION TO NOMINAL GDP (%)

15%
15% 15%
0.4M 14%
13%
13%

12% 12% 13%

12%
0.3M 11%
11% 10%

0.2M

5%

0.1M

0.0M 0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
NOMINAL GDP SECTOR CONTRIBUTION TO NOMINAL GDP SECTOR CONTRIBUTION TO NOMINAL GDP (%)

Source: Ministry of Finance and National Planning 2023 Annual Economic Report.

2.2 Mining production output and commodity prices

2.2.1 Copper
Production
In 2023, Zambia produced 698,566 tonnes of copper, which was a 7.9% reduction on the 763,500 tonnes
produced in 2022.2 This continued the downward production trend witnessed in recent years. According to
the United States Geological Survey Mineral Commodity Summaries Report, Chile, the world's largest
copper producer, also experienced a reduction in output, with production falling 330,000 tonnes from 5.3
million tonnes in 2022 to 5 million tonnes in the year. In contrast, copper production in the Democratic
Republic of Congo (DRC) increased from 2.35 million to 2.5 million tonnes in 2023. This trajectory is
expected to continue. It is anticipated that the DRC’s Ivanhoe-owned Kamoa-Kakula Copper Complex,3
which is expected to be the world’s fourth largest copper mining operation by the end of this year, will ramp
up the country’s copper production from 393,551 tonnes in 2023 to an annual output of 600,000 tonnes by
the end of 2024.
2
Ministry of Mines and Minerals Annual Report 2023.

3
https://www.ivanhoemines.com/what-we-do/operations-projects/kamoa-kakula-mining-complex/

Zambia 2024 Mining Report - Third Edition PwC | 7

The graph below shows Zambia's production output compared with other copper producing countries, Chile
and the DRC.
Figure 3: Annual copper output for Zambia, Chile and the DRC
Power BI Desktop

6,000

5,000

4,000
Chile, DRC and Zambia

3,000

2,000

1,000

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Chile DRC Zambia

Source: US Geological Mineral Commodity Summaries

A summary of global copper production in 2023 compared to 2022 by country is as follows.

Table 2: Global copper production in 2023 compared to 2022 by country

Rank Description 2023 2022 Change

1 Chile 5,000 5,330 -6%

2 Peru 2,600 2,450 6%

3 DRC 2,500 2,350 6%

4 China 1,700 1,940 -12%

5 United States 1,100 1,230 -11%

6 Russia 910 936 -3%

7 Indonesia 840 941 -11%

8 Australia 810 819 -1%

9 Mexico 750 754 -1%

10 Zambia* 698 764 -9%

11 Kazakhstan 600 593 1%

12 Canada 480 520 -8%

13 Poland 400 393 2%

Other countries 3,100 2,850 9%

World total (rounded) 22,000 21,900 0%

Source: US Geological Mineral Commodity Summaries

4
US Geological Mineral Commodity Summaries.

Zambia 2024 Mining Report - Third Edition PwC | 8

The first quarter of 2024 showed some recovery in copper production, with Zambia producing 165,984
tonnes of copper, an increase of 14.9% compared to the first quarter of 2023 when 144,453 tonnes were
produced. However, this outturn was 4.7% lower than that of the fourth quarter of 2023. Overall, Zambia is
yet to see sustained quarter-on-quarter growth in production.

Copper prices
Copper prices have remained robust in 2023 and 2024, reflecting strong market demand. In 2023, the
average price of copper was US$8,490 per metric tonne. This upward trend continued into 2024, with the
price reaching US$9,390 per metric tonne by the end of June. This is a significant increase compared to the
average price of US$8,822 per metric tonne recorded in 2022.

Figure 4: Copper Prices

Power BI Desktop

10K

8K
Copper price US$/Tonne

6K

4K

2K

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Bank of Zambia.

2.2.2 Cobalt
Production
Cobalt production decreased by 17.4% to 207 tonnes in 2023 from 251 tonnes in 2022 (Source: 2023 Annual
Economic Report, Ministry of Finance and National Planning). The reduction in production was due to
reduced copper production, from which cobalt is a by-product.5

In 2022, Zambia signed a memorandum of understanding with the DRC that would allow the two countries
to develop jointly a supply chain for electric vehicle batteries.

Zambia's cobalt production has remained relatively stable since 2018. In contrast, cobalt output in the DRC
has risen sharply and the DRC continues to dominate global cobalt production, contributing around 70% of
the world's supply in 2023.
5
Ministry of Finance and National Planning 2023 Annual Economic Report

Zambia 2024 Mining Report - Third Edition PwC | 9

Figure 5: Annual Cobalt Production: Zambia, Russia, and DRC (MT)

Power BI Desktop

150000
Russia, DRC and Zambia

100000

50000

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Russia DRC Zambia

Source : US Geological Mineral Commodity Summaries.

The table below shows Zambia's annual cobalt production (in tonnes) relative to the world leader, the DRC.

Table 3: Zambia's annual cobalt production (in tonnes) compared to the DRC.

Year Zambia DRC Zambia/ DRC

2019 378.9 100,000 0.38%

2020 316 98,000 0.32%

2021 246.8 120,000 0.21%

2022 251.1 144,000 0.17%

2023 207 170,000 0.12%

Source: Ministry of Mines and Mineral Development 2023 Annual Report

Cobalt prices
In contrast to copper, cobalt prices experienced a notable decline in 2023. The average price of cobalt
dropped from US$63,739 per metric tonne in 2022 to US$55,000 per tonne in 2023. This downward trend
persisted into 2024, with the price decreasing to US$26,401 per metric tonne as of July.

Zambia 2024 Mining Report - Third Edition PwC | 10

Figure 6: Cobalt Prices

Cobalt price
Power BI Desktop

80K

70K

60K
Cobalt price US$/Tonne

50K

40K

30K

20K

10K
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Bank of Zambia.

2.2.3 Nickel

Production
Nickel production in Zambia increased by an impressive margin in 2023 compared to previous years. The
Munali Nickel deposit in Mazabuka District and the Enterprise Nickel deposit in Kalumbila District were
critical contributors to this growth. Nickel production increased by 96.6% from 4,059 tonnes in 2022 to 7,980
tonnes in 2023. It is worth noting that nickel production in 2024 is expected to rise further as the Enterprise
Nickel project moves into full-scale production.6
Figure 7: Nickel production (tonnes) and price (US$)

Power BI Desktop

8,000 US$30K
7,980
US$29K

US$28K

6,000
US$26K

US$24K
Production

4,059
Price

4,000 3,834

US$22K

US$20K
2,000 US$20K

US$18K

US$16K

0 US$16K
2021 2022 2023
Production Price

Source: Ministry of Finance and National Planning 2023 Annual Economic Report.

6
Ministry of Finance and National Planning 2023 Annual Economic Report.

Zambia 2024 Mining Report - Third Edition PwC | 11

2.2.4 Gold

Production
In 2023, gold production decreased by 36.5% to 2,237kg from 3,526kg in 2022. This reduction is
attributed to low ore grades.

Zambia Gold Company is the company charged with driving the formalisation and growth of the gold
sub-sector. The ongoing development of gold marketing centres by the Ministry of Mines and Mineral
Development is expected to stimulate growth and enhance transparency in this sub-sector.
Figure 8: Gold production (kg) and price (US$)
Power BI Desktop

4,000 US$2.0K
US$1.943K
3,599
3,526
US$1.800K US$1.801K

3,000 US$1.5K

2,237
production

Price $
2,000 US$1.0K

1,000 US$0.5K

0 US$0.0K
2021 2022 2023
production Price $

Source : Ministry of Finance and National Planning 2023 Annual Economic Report.

2.2.5 Emeralds
Gemstones, particularly emeralds, are playing an increasingly significant role in Zambia's mining sector
output. The Ministry of Mines and Mineral Development has been actively promoting the exploitation of
non-traditional minerals such as gemstones to diversify the mining sector. It is expected that precious
stone production will increase as the current geophysical mapping should reveal new discoveries. As
reported in the Ministry of Finance and National Planning’s 2023 Annual Economic Report, emerald
production fell by 33.8% in 2023 to 14,813kg from 22,381kg in 2022.7
Figure 9: Emeralds Production (kg)
Power BI Desktop

25,000

22,381

20,000

14,813
15,000
Production

12,871

10,000

5,000

0
2021 2022 2023

Source : Ministry of Finance and National Planning 2023 Annual Economic Report.
7
Ministry of Finance and National Planning 2023 Annual Economic Report.

Zambia 2024 Mining Report - Third Edition PwC | 12

2.3 Mineral export earnings
According to the Zambia Statistics Agency, in 2023, Zambia recorded total export earnings of US$10.5
billion compared to US$11.7 billion in 2022.8 This represents a 10.5% decrease in export earnings. Copper,
cobalt and gold exports accounted for US$6.7 billion of total export earnings in 2023 compared to US$8.3
billion in 2022. During the same period, Zambia's non-traditional exports increased by 20.2% to US$4.2
billion in 2023 from US$3.5 billion in 2022, representing 36% of total exports. Higher electricity, sulfur,
cement, lime, iron and steel exports drove the growth in non-traditional exports.9

In the first half of 2024, exports rose by 0.3% to US$5.3 billion because of higher production and copper
prices. Non-traditional exports decreased by 6.1% to US$1.7 billion mainly due to a reduction in exports of
sulphur, cane sugar and re-exports of vehicles, according to the Ministry of Finance and National Planning’s
mid-year economic Review.

The table below shows total export earnings:

Figure 10: Export Earnings- US$ billion
Power BI Desktop

12
11.5
11.2

10.5

10

8.4
8.1
8

6.6

4 3.8
3.2
2.6

0.2 0.2 0.1

0
2021 2022 2023
Copper NTEs Gold Total

Source: Zambia Revenue Authority | Bank of Zambia | Zambia Statistics Agency

Figure 11: Export earnings waterfall- US$'billions

13

12 11.5

11 0.6 10.54

10 -0.06
-1.5
9

4
2022 exports Copper NTE Gold 2023 exports

Source: Zambia Statistical Agency

8
Zambia Statistical Agency | 9 Zambia Revenue Authority

Zambia 2024 Mining Report - Third Edition PwC | 13

2.4 Mining and quarrying's contribution to tax revenues
A critical measure of the sector's contribution to the economy is the percentage of domestic taxes generated
by mining. When corporate taxes and mineral royalties are combined, figures published by the Zambia
Revenue Authority (ZRA) show that mining is the most significant contributor to the treasury, contributing
43.37% of tax revenues in 2023,[5] despite a reduction of K7.8 billion in collections compared to 2022. In
2023, K43.6 billion was collected compared to K51.4 billion in the previous year. Despite the lower amount
generated in 2023, the mining sector remains the most significant contributor to the treasury.

According to the ZRA, copper prices surpassed projections in 2023, averaging US$8,482 per tonne
compared to the ZRA's forecast of US$7,914 per tonne. However, the benefits of higher copper prices were
offset by reduced copper production levels due to low copper ore grades and operational challenges at
several major mines.10 In 2023, revenue collection from mining company income tax, mineral royalties and
export duty on mineral concentrates (core mining taxes) stood at K13.1 billion against the initial target of
K21.9 billion, which together accounted for a deficit of K8.7 billion, representing 91.1% of the total negative
performance throughout the year. Lower copper production leads to lower tax revenue and reduced foreign
exchange earnings, which in turn leads to poorer economic performance.

The graphs below illustrate total taxes, and the contribution extraction royalties and the mining and quarrying
sector contribute to total taxes. Mining and quarrying taxes consist of income tax and mineral royalties.
Figure 12: Contribution to Total Tax (K’million)
Power BI Desktop

100,642
100,000 12,417

90,342 12,000

83,573

80,000
10,445
Total taxes and Mining and quarrying

10,000
Extraction royalties

60,000 57,423
52,681

7,709 8,000
40,994
39,233
40,000 35,929

22,596
19,083
6,000
20,000 5,348

4,185
0 4,000
2019 2020 2021 2022 2023
Total taxes Mining and quarrying Extraction royalties

Source is Zambia Revenue Authority 2023 Annual Report.

Figure 13: Percentage of Mining Tax to Total Tax

Power BI Desktop

70%

61.8%
60%

50% 48.7%
46.9%
44.3%
44.2%
39.3% 39.0%
40%
35.8% 36.1% 36.2%
37.0%
31.0%
30%
26.0% 28.5%
25.0%
20% 22.3%
14.86%
12.00%
9.79% 9.31%
10% 8.17%
7.94% 8.00%
6.26%

0%
2016 2017 2018 2019 2020 2021 2022 2023
Total Tax Mining sector taxes to total taxes Mineral royalties to total taxes

Source: Zambia Revenue Authority 2023 Annual Report.

10
Zambia Revenue Authority 2023 Annual Report.

Zambia 2024 Mining Report - Third Edition PwC | 14

VAT refunds
According to the ZRA 2023 annual report, VAT refund claims increased by 10.5% from 13,671 in 2022 to
15,103 in 2023. A total of K16.1 billion was paid in VAT refunds in 2023, compared to K16.1 billion in 2022, a
reduction of 0.1%. In response to the increase in VAT refund claims, the ZRA decided to exempt large and
specialised taxpayers from the withholding VAT mechanism. The ZRA has since reported that the exemption
of large taxpayers from withholding VAT has reduced the rate at which VAT refund claims have been
accumulating, freeing up the cash flows of the affected taxpayers. Since the exemption was introduced on
1 August 2023, there has been a significant reduction in VAT refunds. A comparison of the performance
between 2022 and 2023 reveals a substantial drop in VAT refunds.11

2.4 Share of investment

Zambia has seen a significant increase in investments pledged and actualised in the last three years.
Committed investments have increased from US$110.7 million in 2020 to US$4.6 billion in 2023. However,
actualised investments fell from US$4.5 billion in 2022 to US$ 2.1 billion in 2023, a reduction of 52%. The
mining sector's share of total committed investments in Zambia was 11%. The manufacturing sector
recorded the highest share of committed investments at 40%, while the energy sector recorded 36%.

According to the Zambia Development Agency’s quarter two report,12 125 investment projects were recorded
in the second quarter of 2024, surpassing the quarterly target of 90 and achieving 138.9% of the quarterly
goal. Of the investments recorded, US$2.4 billion was committed, exceeding the quarterly target of US$2
billion. The energy sector led with the highest committed investments, totaling US$1.1 billion. This was
followed by the manufacturing, mining, construction and agriculture sectors, which recorded US$711.9
million, US$316.2 million, US$88.6 million and US$79.2 million, respectively. The remaining sectors
collectively accounted for US$72.8 million.

Figure 14: Annual Investment Recorded by ZDA US$ Million

Power BI Desktop

Year 2020 2021 2022 2023

4,000
3,819

3,000
Annual Investment US$

2,000
1,820

1,322

1,000

661 643

400
344 301
152 159 128
80 38 37 37
22 18 27
0
Mining Manufacturing Agriculture Other Transport

Source: Zambia Development Agency

11
Zambia Revenue Authority 2023 Annual Report.
12
Zambia Development Agency 2023 Annual Report.

Zambia 2024 Mining Report - Third Edition PwC | 15

2.5 Mining sector dividends and royalties
In 2023, ZCCM IH and Kansanshi Mining Plc concluded a royalty agreement that guaranteed the payment of
annual royalties equivalent to 3.1% of total revenues generated by Kansanshi to ZCCM IH. The transition
arrangements resulted in a special dividend receipt of US$195 million (K4.37 billion) by ZCCM IH in 2022. As
the royalty agreement took effect, ZCCM IH received royalties of K1.2 billion (US$56.1 million) and dividends
of K170.74 million (US$9.1 million) from Kansanshi Mining Plc. Due to improved performance and a positive
equity position, CNMC Luanshya Copper Mines declared dividends of US$30 million, with US$6 million paid
to ZCCM-IH (2022: US$70 million was declared). Our analysis of the published ZCCM IH annual reports
shows the following trends in the investment income:13
Figure 15: Dividends and Royalties Received (K’million)
Power BI Desktop

5,000 4,868

4,000

3,000

1,941
2,000

956
1,000
803

305
160 200 209
80 123 133
29 35 49 41
0
2010 2011 2012 2013 2014 2015 2016 2017 2019 2019 2019 2020 2021 2022 2023
(Dec) (Mar)

Source: PwC analysis

Figure 16: ZCCM-IH Dividend and Royalty Returns 2010-2023

1,827,303 (20.85%)

6,938,547 (79.15%)

Kansanshi (K) Others (K)

Source: ZCCM IH annual reports

13
ZCCM IH Annual Reports.

Zambia 2024 Mining Report - Third Edition PwC | 16

3. Significant mining
sector developments
3.1 The energy crisis
Zambia's intention to increase copper production to three million tonnes by 2031 will inevitably be impacted
by the huge power deficit that the country has faced since early 2024.

Of Zambia’s 3,811 MW of installed electricity generation capacity, 84% is from hydro, 9% from coal and the
remainder from other sources such as solar. In Zambia, mining is the biggest consumer of energy,
accounting for 51% of energy consumption, followed by domestic use, which accounts for 33%. As of
August 2024, the country had a power generation deficit of 1,381 MW (Source: Ministry of Energy statement,
August 2024). This has resulted in stringent power rationing on an ongoing basis.14

The productivity of the whole country has been affected by the power deficit. In response, various players in
the mining sector have made their own arrangements to meet their power requirements from neighbouring
countries such as Namibia and Mozambique, usually at a higher cost. This increased cost of power will
result in subdued profits and lower tax contributions from mining companies.

On 13 February 2024, the Ministry of Energy launched the Integrated Resource Plan (IRP), a comprehensive
strategy document designed to secure a sustainable, reliable, cost-effective energy supply for the next three
decades. The IRP focuses on four core areas: demand, generation, transmission and distribution. However,
one of the major obstacles identified in the IRP is the need for substantial funding, with an estimated US$14
billion required for its full implementation. Given that most energy projects are not short-term, these projects
must commence as soon as possible if Zambia is to meet the expected increase in demand needed to reach
the three million tonne copper production target by 2031.

Getting the best energy mix will be critical to managing future energy disruption and ensuring the country
remains on course to meet its copper production targets.
14
Ministry of Energy.

Zambia 2024 Mining Report - Third Edition PwC | 17

3.2 Investment update
Zambia has seen a significant increase in pledged and actualised investments since the start of 2022. In
May 2022, First Quantum Minerals announced additional investment in Zambia of US$1.3 billion via their
Kansanshi S3 project and Enterprise Nickel Mine. Since then, there have been several notable mining
investment projects announced. The nature and scale of the projects signal a much-improved outlook for
the sector. Stakeholders can be confident that Zambia's mining fortunes will improve if the projects are
successfully implemented.

The investments include exploration ventures, expanding existing projects and resolving issues affecting
problematic mining assets.

Below is a list of notable projects that have been announced in the recent past:
Table 4: Notable projects investment estimates

Company Investment Investment

name details estimates (US$)

First Kansanshi S3 expansion and the Enterprise Nickel project. US$1.25 billion -
Quantum Both projects are located in North-Western Province. Once S3 Expansion
completed, the S3 expansion project is expected to increase to project
approximately 250,000 tonnes per annum (2022 production
was 146,282 tonnes).15 US$100 million -
Nickel Project

Moxico Located in rural North-Western Province, Mimbula Copper US$180 million

Resources Project is poised to leverage the anticipated increase in16 cumulative
demand for copper due to the global shift to renewable energy.

Lumwana The company is investing in an expansion project that is US$2 billion

Copper expected to increase Lumwana’s annual production to an
Mining estimated 240,000 tonnes of copper from a 50 million tonne
per annum process plant over a 36-year life of mine.17

KoBold Exploration is still underway, with the intent for production to US$150 million
Metals begin by 2030. Kobold Metals indicated it holds plans to fast
track development of the new mine at its Mingomba deposit,
which would cost about US$ 2 billion. According to KoBold,
the Mingomba deposit that is still under exploration has copper
ores grade of about 5% which could indicate the highest grade
among Zambian discoveries in 100 years. The Ore grade of 5%
deposit quality will place Mingomba alongside Ivanhole’s
Kamoa Kakula Copper mine in the DRC.18

China’s This will be distributed as follows: Chambishi Copper Mine US$1.3 billion
Nonferrous US$450 million; Luanshya copper mine US$600 million; and by the end of
Mining Metal Sino Metals and warehouse project US$200 million. 2025.
Mining (CNMC)

Arc Minerals Joint exploration project with Anglo American Exploration. US$90 million

15
https://www.miningweekly.com/article/fqms-kansanshi-s3-mine-expansion-back-on-track-2023-10-19
16
https://www.businesslive.co.za/bd/world/africa/2022-04-06-britains-moxico-resources-plans-100m-expansion-of-copper-mine-in-zambia/
17
https://www.barrick.com/English/news/news-details/2024/lumwana-super-pit-expansion-officially-launched/default.aspx
18
https://trendsnafrica.com/kobold-metals-to-invest-us-150-million-in-zambia-anticipates-production-of-copper-and-cobalt-within-a-decade/
19
https://economictimes.indiatimes.com/markets/stocks/news/update-2-vedanta-weighs-minority-stake-sale-in-zambian-copper-assets-to-
reboot-mines/articleshow/107498921.cms

Zambia 2024 Mining Report - Third Edition PwC | 18

 Company Investment Investment
name details estimates (US$)

In 2024, International Resource Holdings (IRH) completed the US$1.1 billion

Mopani acquisition of 51% stake in Mopani Copper Mines for US$1.1
Copper billion. IRH’s current output is around 60,000 tonnes and with
Mines the new capital injection, plans are underway to ramp up
production to 225,000 tonnes per annum. As of August 2024,
IRH had produced 200 tonnes of copper following its revival.

Konkola Konkola Copper Mines officially handed over to Vendata US$1.25 billion
Copper Resources in August 2024. The company paid off over
Mine US$246 million to its creditors to settle the long outstanding
debt. Once back online, Konkola is expected to produce over
300,000 tonnes of copper per annum.19

3.3 Exploration update

Mining exploration is searching for mineral resources beneath the earth's surface to assess their potential for
economic extraction. This involves a series of methods, including geological surveys, sampling of soil and
rock, and drilling to gather data on the size and quality of mineral deposits. The primary goal is to identify
viable sites for future mining operations, ensuring that resources can be extracted efficiently and sustainably.
By evaluating the geological and economic aspects, mining exploration helps determine whether a site is
worth developing into a full-scale mining project.

Geological surveys and licensing

● In an unprecedented move, the Ministry of Finance has allocated K198 million in the 2024 national
budget for a high-resolution countrywide geological survey. This survey will initially cover the Southern,
North-Western, Western, and Central provinces, with plans to extend to the entire country over the next two
years. This significant investment, the largest in recent history for geological surveys, aims to enhance the
understanding of Zambia's mineral resources.

● Geological mapping, exploration surveys and exploration licenses. To build upon the current geological
knowledge, the Ministry of Mines and Mineral Development has undertaken geological mapping for selected
areas of the country.20 This effort has increased the national geological coverage from 55.6% to 56.4%. The
mapping and exploration surveys are crucial for identifying new mineral deposits and providing valuable data
for future mining projects.

● Geochemical sampling has been conducted in areas such as Zimba and Mkushi, involving the collection
of 1,400 samples. These samples target minerals such as lithium, tin, and graphite, with the results still
undergoing analysis. This sampling is essential for identifying potential mining sites and understanding the
mineral composition of these regions.

● Monitoring exploration license holders, including inspections. To ensure that various exploration license
holders adhere to their exploration plans, the Ministry of Mines and Mineral Development conducted
inspections involving 400 companies. These inspections are vital for maintaining the integrity of the
exploration process and ensuring that license holders comply with regulatory requirements. The ministry
aims to foster a transparent and accountable exploration environment by conducting thorough inspections,
ultimately contributing to the sustainable development of Zambia's mineral resources.

2024 Budget Address

20
Ministry of Mines and Mineral Development.

Zambia 2024 Mining Report - Third Edition PwC | 19

 Part 2 of
"A First-Hand Perspective
on Exploration"
by Mfikeyi Makayi,
CEO KoBold Metals Africa

Kurt's closing message in the 2023 PwC Zambia Mining Report

KoBold's mission is to make exploration more efficient and effective, and we're investing heavily in research
and development to achieve that mission. We're developing new sensors for measuring novel properties and
phenomena to complement our AI software. Indeed, KoBold has the largest exploration research and
development budget of any mining company.

Overall, exploration is a costly and high-risk venture that requires patient capital and the

benefit of today's technological advances if it is to deliver more quickly. It must be supported by the right policies
that ensure that the right people own licenses and that focused incentives are given to those ready to invest in
much-needed ventures.

Last year, my colleague, Dr Kurt House, laid the hypotheses or falsifying them. With the
foundation for why exploration needs more advancements in artificial intelligence, machine
research and development and increased learning and high-tech computing power,
technology innovations to improve the rate and exploration activities have been propelled to new
cost of discovering new mineral deposits. Even heights.
with such innovations, a sound and stable policy
framework is essential to enable domestic capital Every existing mining operation began as a
formation and attract foreign direct investment in geologic hypothesis—but most geologic
exploration and development projects. hypotheses don't become operating mines.
The objective of exploration is to collect the
Zambia, endowed with natural and mineral incremental information that is most likely to
resources, undoubtedly attracts capital, but falsify the original hypothesis. Fortunately for
capital is fleeting. Long-term access to capital Zambia, decades of work exist from pre-colonial
markets correlates with perceived jurisdictional times on how mineral-bearing rocks formed
risks. An unpredictable and unstable policy millions of years ago on the Copperbelt.
environment means executives must, on the one Unfortunately for Zambia, this has blurred the
hand, build projects while managing versatile, importance of conducting meaningful exploration
even volatile, relationships on the other. with the latest technology to turn prospects into
producing mines. Comfortable and familiar with
Mineral exploration is a sequence of activities mining, exploration investment had lagged. This
based on hypotheses of mineral prospects and has taken us back to the drawing board, a
testing those hypotheses to "prove them right or regenesis of sorts, to the need for an exploration
wrong". The sequence of activities varies based industry focus.
on scientific knowledge and principles of the earth
beneath our feet. These activities involve subsets
of the more expansive geoscience branches such
as geophysics, geochemistry, paleontology,
mineralogy and petrology. To further understand
the mineral prospects, these disciplines require
deploying various study techniques and surveys
to collect geoscientific data supporting multiple

Zambia 2024 Mining Report - Third Edition PwC | 20

Exploration at Mingomba Next steps: mine development
Historical exploration drilling in the Mingomba Mingomba is an exciting deposit and the work
area of Chililabombwe District dates back to the to guide mine optimisation has commenced.
pre-1950s, to what was then known as Konkola Industry standards are guided by terms like
North, and various parties have drilled the area up preliminary economic assessments, prefeasibility
to 2022. Since KoBold's entry in 2022, and with and feasibility studies that inform the full project
ZCCM-IH, we have drilled 67,000 metres to requirements. For Mingomba, this includes
depths of over 2km, characterising and unlocking scientific and engineering studies that cover
the value of a consistent continuous high-grade technical engineering and mine design (building a
(greater than 5%) ore body. Mingomba is shaft complex, process plants, surface and
becoming one of the world's most exciting copper underground infrastructure, and meeting all
projects more than 70 years later. The deposit sits environmental and regulatory requirements).
between two large mines and is located within the Successful mine optimisation will be followed
heart of the century-old Copperbelt mining by construction, commissioning and then
district. production. The level of acceleration to become
production-ready by 2031 – 2032 requires
To conduct this work at this rate, an agile optimisation of the engineering processes,
operation that began with 15 employees now has transparent and effective stakeholder
over 300 employees, including contractors. More collaboration, and policy stability for large-scale
than US$250million has been invested in the asset investment and operation to be realised so that
in just 18 months. A team of explorers, including the project can produce copper for many decades
geoscientists, geotechnicians, data scientists, to come. The eco-system of a project built of this
engineers and drillers, combine to form the heart magnitude will generate significant economic
of exploration work, supported by a field activity through direct and indirect employment,
operations team and shared services in health, increased trade activity, and development of
safety, environment, community engagement, IT, support services.21
HR, finance and administration.

In exploration, as with any scientific work, ideas

need to be proven and, at KoBold Metals,
fostering a culture of being a Bayesian explorer
means hypotheses are repeatedly tested or
falsified, i.e. "proven right or wrong" based on
conditional probabilistic principles coupled with
scientific computing prowess. In developing and
testing our multiple hypotheses at Mingomba,
data science has enabled us to maximise the
probability of intersecting areas of significant
copper grade and thickness. In 2024, Mingomba
continued drilling to fully characterise the orebody
morphology, composition and competency to
guide mine optimisation. Wider exploration projects
A typical drilling exploration site has three KoBold Metals, in partnership with Tertiary
fundamental work areas: the drilling site where Minerals Zambia, is conducting exploration drilling
drilling operations occur; the core processing on the Konkola West License, southwest of the
repository where geologists receive, process, Mingomba tenure and west of KCM's tenure.
sample, dispatch and store the drill core; and Drilling commenced in April 2024. Most recently,
administrative facilities. In remote areas, an KoBold Metals teamed up with Midnight Sun to
accommodation facility is required for continuous explore the Dumbwa area of Solwezi,
operations. The Mingomba exploration campus is North-Western province. Globally, KoBold Metals
a state-of-the-art facility that includes the above has 60 exploration projects in 14 countries,
and deploys the company's world-class focused on copper, cobalt, nickel and lithium.
technology abilities within the processing and
study of drill core, a key element of testing Mineral exploration work is the foundation of the
hypotheses through actual technical programmes mining industry. It is necessary and requires
to analyse findings. patience. It can move rapidly if all stakeholders
play their part.
21
https://www.pdu.gov.zm/blog/mingomba-mine-project-takes-shape

Zambia 2024 Mining Report - Third Edition PwC | 21

Table 5: Mingomba Fact Box

Mingomba fact box

Metres drilled 64,300 metres of diamond drilling since November 2022

Team employed, Over 300

including business
partners

Corporate social 1. Kawama Combined School

investments
committed 2. Mwabu Education Programme

3. UNZA/CBU/Stanford scholarship partnership

4. 5 health facilities in direct area of impact - provision of medical

equipment (Project Cure)

5. Sustainable farming programme for 60 farmers

Partnerships Archive digitisation projects with ZCCM-IH & Geological Survey Department

Time to production Eight years

planned

Expected initial 300kTPA

production

Source: KoBold Mining

Zambia 2024 Mining Report - Third Edition PwC | 22

3.4 Regulatory and policy Notable is that, if enacted, Zambia would have a
dedicated mining sector regulator - something that
developments has been absent. If well-designed and implemented,
the Commission could be the foundation for
Shortly after their election in 2021, the United Party long-term policy stability. This is because, if run
for National Development government announced its professionally and independently, the entity would be
intentions to achieve several goals regarding the channel through which policy is developed,
managing the country's mineral resources and mining tested, implemented and monitored.
sector. These included:
Additionally, there has been concern about the level
1. Diversifying the economy away from copper of non-compliance by some players in the sector.
mining as the mainstay of the mining sector and Better oversight can ensure that the occurrence of
the broader economy. non-compliance is reduced significantly.

2. Promoting a competitive, stable and predictable Our long-held view is that the lack of a
policy environment. well-established regulator is part of why the country
has, over the years, seen many changes to various
3. Enhancing the monitoring mechanisms to policy positions impacting the sector.
determine the volume and content of minerals
extracted. There is some concern about whether a regulator
may be overreaching in its operations. There is a
4. Increasing local ownership in the sector. need for extensive consultation, careful mandate
design, staffing with the right caliber of individuals,
5. Enhancing local participation in the mining value transparency in operations and consistent application
chain. of the set mandate. Ultimately, it must inspire even
greater confidence in the sector.
To further these ambitions, the Government
developed and published several policy documents.
Not all are effective as yet. Notable were:

1. The Minerals Regulation Commission Bill 2024;

2. The Draft Local Content Regulations;

3. The Critical Minerals Strategy;

3.4.1 The Minerals Regulation

Commission Bill
Notably, the Zambian Cabinet announced its
approval for publishing and introducing the Minerals
Regulation Commission Bill, 2024 in Parliament.22

The objectives of this bill are to:

1. Regulate and monitor the development and
management of the minerals in the Republic of
Zambia.

2. Establish the Mineral Regulation Commission and

provide for its functions.

3. Establish the Mining Appeals Tribunal.

4. Repeal and replace the Mines and Minerals

Development Act, 2015.

5. Provide for matters connected with or incidental

to the preceding.

22
https://www.parliament.gov.zm/sites/default/files/documents/bills/THE%20MINERALS%20REGULATION%20COMMISSION%20BILL%2C%202024.pdf

Zambia 2024 Mining Report - Third Edition PwC | 23

3.4.2. The National Critical Minerals Some proposals under the third pillar of enhancing
strategic Government and private sector partnerships
Strategy appear controversial, however. Notable examples
include:
Currently, all minerals are classified as critical for
the sector. The Ministry of Mines and Mineral 1. Establish a Government special purpose vehicle
Development has issued the National Critical Mineral as an investment arm in the critical minerals
Strategy 2024 to 2028.23 This strategy aims to guide sub-sector.
the effective exploitation of the country's mineral
resources to foster socio-economic development. 2. Develop a production sharing mechanism of a
The transition to renewable energy and technological minimum of 30% for government's special
advancements has created new opportunities for the purpose vehicle in the critical minerals sub-sector.
sector, particularly for minerals beyond the traditional
copper, such as lithium, nickel, cobalt and 3. Establish an investment framework of a minimum
manganese. of 30% of government's special purpose vehicle
in all greenfield projects in the critical minerals
The policy has the following aims: sub-sector.
1. Advancing geological mapping and mineral 4. Establish regional and national value chains in
resource development and management critical minerals exploitation.
2. Enhance strategic government and private sector 5. Formulate a local content threshold of at least
partnerships 35% of the annual procurement for the critical
minerals' sub-sector.
3. Beneficiation and value addition
There is currently little information regarding how
4. Research and development exactly the Government will implement the above
strategies. It is clear that greater participation is
With the global shift towards electric vehicles, the desired, but at what cost? Clarity regarding how the
demand for minerals that are core components in above intentions will be achieved is crucial. For
batteries, such as lithium, nickel and cobalt, is example, will production and investment in assets be
expected to rise significantly. According to the World at fair value?
Bank Group, the production of minerals like graphite,
lithium and cobalt could increase by nearly 500% The absence of clarity will result in greater
by 2050 to meet the growing demand for energy uncertainty, which is not ideal for spurring investment
technologies. It is estimated that over three billion in the sector.
tonnes of minerals and metals will be needed to
deploy wind, solar and geothermal power and energy
storage required for achieving a below two °C future.

The International Energy Agency has projected that

meeting the target of net zero globally by 2050 will
require six times more mineral inputs in 2040 than
today. This underscores the critical importance of
these minerals in the transition to renewable energy
and the need for strategic planning and investment to
ensure their sustainable supply. The National Critical
Mineral Strategy is crucial in positioning Zambia to
capitalise on these opportunities and contribute to
global efforts to combat climate change.

23
National Critical Minerals Strategy 2024 - 2028

Zambia 2024 Mining Report - Third Edition PwC | 24

3.4.3 The draft Local Content Regulations
The Zambian Government has been working on implementing the Local Content Regulations for the mining
sector to increase the participation of Zambian businesses and individuals in the country's mining industry.
These regulations are part of broader efforts to promote local economic development and ensure that
Zambian citizens and companies benefit more directly from the mining sector.

The key features of the draft Local Content Regulations include:

1. Local procurement: mining companies are required to prioritise sourcing goods and services from
Zambian-owned businesses. This includes everything from equipment to specialised services, with an
emphasis on developing local suppliers in the value chain.

2. Employment of Zambians: the regulations mandate that mining companies should give preference to
Zambian citizens in employment. The focus is also on training and upskilling local workers.

3. Capacity building: mining firms are encouraged to invest in the development of local suppliers and
employees through training, technology transfer and partnerships. The aim is to boost the capabilities of
Zambian enterprises so that they can meet industry standards and compete effectively.

4. Monitoring and compliance: there will be mechanisms to monitor compliance with the local content
provisions, and mining companies will need to report on their local procurement, employment and
capacity-building efforts.

5. Strategic sectors: the regulations identify key sectors where local content should be maximised, such
as mining inputs, transportation, logistics and catering, among others.

6. Stakeholder involvement: the Government aims to collaborate with the private sector, local
communities and other stakeholders to ensure the regulations benefit a broad range of Zambians while
also maintaining a competitive mining sector.

The local content strategy is expected to enhance local industry participation, create jobs and stimulate
other sectors of the economy.

3.4.4. Overall assessment of the regulatory environment

In order to continue to attract investment into the sector, policy stability is critical. The number of new
policies period in a short period may actually signal the opposite. It may be more prudent to stagger the
changers over a period with the timetable shared with all stakeholders. Adequate consultation should also
be undertaken with all stakeholders so that there is buy-in.

Zambia 2024 Mining Report - Third Edition PwC | 25

 3.5 Artisanal and small-scale miners
The Ministry of Mines and Mineral Development has issued
28 licenses to cooperatives. Additionally, the ministry is
constructing market centres for gold trading in the Rufunsa
and Mumbwa districts. These projects are expected to be
completed by the end of the third quarter 2024.

The ministry has been formalising the artisanal and

small-scale mining sector to enable people to make
meaningful economic contributions. As part of this
initiative, the ministry has licensed 126 gold mining
cooperatives and 65 cooperatives involved in other
minerals besides gold. Sites for constructing gold
marketing centres have been identified in seven districts:
Mumbwa, Rufunsa, Lusangazi, Vubwi, Petauke, Chisamba
and Chibombo.

Several mines are expected to come on board with

Kitumba mine in Mumbwa district, which is scheduled to
commence production within the next three years. A
technical committee on manganese has been created to
enhance oversight over small-scale mining activities.

Kagem is recognised as one of the key producers of

gemstones in Zambia, yet it only accounts for 20% of the
nation's total gemstone production. This highlights the
importance of formalising and supporting this subsection
of the mining sector. The Government will foster
sustainable growth and development within the gemstone
industry by providing the necessary regulatory framework
and support. This initiative is essential for maximising the
economic benefits of gemstone mining and ensuring that
the sector contributes meaningfully to the country's overall
economic prosperity.

The Ministry of Mines and Mineral Development has made

significant strides in formalising the artisanal and
small-scale mining sector. The anticipated start of
operations at new mines, such as the Kitumba mine, and
the establishment of a technical committee on manganese
further underscore the Government's commitment to
enhancing oversight and fostering sustainable growth in
the mining sector.

The substantial increase in the 2024 budget allocation for

the sector from K50 million to K131 million reflects the
Government's dedication to developing the mining indus-
try. This approach is intended to have a trickle-down effect
on Zambia’s overall economic prosperity. The Ministry of
Mines and Mineral Development has made significant
announcements that relate to formalising the artisanal and
small-scale mining sector. With the anticipated start of
operations at the new Kitumba mine, the ministry’s
establishment of a technical committee on manganese is
expected to enhance oversight and foster sustainable
growth in the mining sector.

Zambia 2024 Mining Report - Third Edition PwC | 26

4. The journey to three million
tonnes of copper
Attaining the Government’s three million tonne copper production target by 2031 remains an ambitious
target for the sector. There are several factors that need to be considered and addressed to achieve this
target. In July 2024, the Government launched the National Three (3) Million Tonnes Copper Production
Strategy by 2031. This strategy aims to accelerate and maximise the benefits of exploiting copper produc-
tion, with a focus on the following:

i. Creating an enabling environment for copper production expansion.

ii. Monitoring greenfield projects.

iii. Exploiting mineralised tailings.

iv. Supporting artisanal and small-scale mining.

v. Conducting high-resolution aerial geophysical surveys.

vi. Promoting investment.

vii. Building capacity for research and development.

According to the US Geological Survey Mineral Commodity Summaries for 2024, Zambia's estimated
reserves are 21 million tonnes of copper. The country is ranked 10th overall globally. Increasing the country’s
found copper reserves is imperative if significantly higher production is to be achieved.

Zambia 2024 Mining Report - Third Edition PwC | 27

Table 6: Rank of estimated Copper reserves by Country

Rank Description Estimated reserves '000

1 Chile 190,000

2 Peru 120,000

3 DRC 80,000

4 Russia 80,000

5 Mexico 53,000

6 United States 50,000

7 China 41,000

8 Poland 34,000

9 Indonesia 24,000

10 Zambia 21,000

11 Kazakhstan 20,000

12 Canada 7,600

13 Australia 6,100

Other countries 180,000

World total (rounded) 1,000,000

Source: US Geological Mineral Commodity Summaries

{
To assess the probability of achieving the target, we analysed the current
projected output for 2024 and the expected upside from different
investments.

Figure 17: A closer look at the 3m MT copper target

3
million New finds
MT 487,100 MT
Project expansion

410,000 MT Trouble shooting

2024 projected
803,300 MT output

Source: PwC Analysis

US Geological Mineral Commodity Summaries

Zambia 2024 Mining Report - Third Edition PwC | 28

 Our current best-case estimate is a maximum capacity of
1.7 million tonnes, assuming all estimated capacity comes
online immediately. This is unrealistic but gives a sense of
our assessment of the maximum possible production
capacity given current conditions.

1. 2024 projected output: the Ministry of Mines and

Mineral Development projects that Zambia will produce
803,300 tonnes of copper in 2024. In 2023, 698,000
tonnes of copper was produced, while 763,550 tonnes
were produced in 2022.

2. Troubleshooting: This relates to the maximum

projected additional output targets announced for
troubled existing assets. This includes the likes of
Mopani Copper Mines and Konkola Copper Mines.

3. Project expansions: this is the additional production

contribution expected from mining assets that
have announced significant expansion projects to
increase or sustain production. Examples include First
Quantum Minerals' investment into the Kansanshi S3
project and the expansion by Barrick Lumwana.

4. New finds: these represent new discoveries that must

be made to bridge the remaining gap.

It is important to note that:

1. The investments require time before the production

output will be realised.

2. Existing production capacity may decline as assets get

closer to the end of their mine lives. Consequently, the
level of new resource finds will need to be higher than
the three million tonnes annual target if this figure is to
be sustainable and take into account diminishing
resources at older mines.

3. Ramping up production will result in a significant

increase in energy requirements. Zambia is currently
dealing with a severe energy deficit so developing and
implementing a long-term solution to meet the
growing energy demand is imperative if the production
increase goal is to be achieved.

Our overall assessment is that given how much time it takes

to benefit from mining investment, achieving three million
metric tonnes by 2031 appears ambitious. However,
although its achievement is questionable at this stage, there
are signs that Zambia will increase its production
significantly in the coming years.

Refer to appendix 1 for the details on the 3 million MT

copper output target.

Zambia 2024 Mining Report - Third Edition PwC | 29

5.Environmental, social
and governance
The environmental, social and governance (ESG) agenda has made progress in the last decade.

Mining companies need to ensure that they incorporate ESG principles into their production processes,
including value chains and final products. The mining sector has a more significant role in driving sustainable
development and transition to renewable energy by providing materials for infrastructure development and
consumer demand.

Sustainability reporting has continued to be a hot topic globally, driven by the International Sustainability
Standards Board (ISSB). In June 2024, the board issued its inaugural standards, IFRS S1 and S2, with more
expected to be released shortly. In Zambia, the Zambia Institute of Chartered Accountants mandated
adopting these two disclosure standards for publicly accountable entities (listed entities) effective for annual
reporting periods beginning on or after 1 January 2025.

Sustainability reporting is gaining prominence in Zambia due to escalating sustainability/ESG risks. The
country is grappling with severe climate events, such as drought and temperature variations, which are
increasingly frequent and prolonged and present many challenges to various sectors. Key regulatory drivers
for sustainability/ESG disclosures include the Environmental Management Act. 12 of 2011, Employment
Code (Act No. 3 of 2019), Mines and Minerals Development Act, Companies Act (No. 10 of 2017), Section 84
(1) of the Securities Act (No. 41 of 2016) and green loans guidelines, among others. The currently available
sustainability reporting baselines that the mining companies can use are:

● ISSB Sustainability Disclosure Standards

● Global Reporting Initiative standards

● Sustainable Development Goals

● 8th National Development Plan

● Nationally Determined Contributions Implementation Framework

● National Green Growth Strategy

● National Adaptation Plan

These baselines provide organisations with a foundation for consistent, comparable and credible sustainabil-
ity/ESG reporting, aligning with national and international sustainability objectives.

Sustainability reporting is an essential strategic tool for organisations in Zambia, enabling them to navigate
the complexities of modern sustainability challenges and build long-term value and resilience.

Zambia 2024 Mining Report - Third Edition PwC | 30

6. Conclusion
Commodity prices have risen strongly in the last four years and are expected to stay strong for some time. If
Zambia is to exploit these high prices and reach its three million tonnes of copper per annum target, it is
essential that the Government maintains a nurturing policy environment that allows existing and new mining
projects to flourish. Stakeholders that we spoke to for this report said that, in particular, stable tax legislation,
a strong macroeconomic environment and continued political stability were vital for stimulating investment in
mining. An available and reliable energy supply is also critical if the sector is to meet its ambitious production
target.

Given the lengthy exploration and construction phases in mining, the Government could look at creating
policies that encourage AI skills development and favourable pricing of AI technology. For example,
providing tax incentives on technology used in exploration, with Kobold being a point of reference. Kobold
has shown that AI can significantly accelerate the time to commercial production so that a company can
start producing copper and cobalt within 10 years compared to the average 14 years from exploration to full
production. Implementing similar AI-driven strategies could boost investments in the mining sector and help
achieve the target of three million tonnes of copper production by 2031.

Finally, the focus on transition energy continues to provide more opportunities to the mining sector.

Zambia 2024 Mining Report - Third Edition PwC | 31

 Contributors

Andrew Chibuye Malcolm Jhala Nsansa Mkonda Emmanuel Chulu

Country Senior Partner Partner, Tax Services Associate Director Associate Director

Rabecca Hichilo Nyambe Mbanga Kaunda Mwenya Ndanji Simukoko

Associate Director Senior Manager Senior Manager Manager

Evelyn Tembo Kasongo Lufuma Chansa Musonda Gretel Nswana

Manager Senior Associate Associate Associate

Elizabeth Monga Mfikeyi Makayi

Intern CEO, KoBold Metals Zambia

Zambia 2024 Mining Report - Third Edition PwC | 32

 Notes
https://energycapitalpower.com/key-trends-zambia-mining-sector-expansion/

https://www.worldbank.org/en/topic/extractiveindutries/brief/-
climate-smart-mining-minerals-for-climate-action

[1] Ministry of Finance and National Planning 2022 Annual Economic Report.

[2] Ministry of Mines and Minerals Annual Report 2023.

[3] Ministry of Finance and National Planning Economic Report 2023.

[4] file:///C:/Users/emonga003/Downloads/2024%20Mid%20Year%20Economic%20Review%20(3).pdf

[5] Zambia Revenue Authority 2023 Annual Report.

[6] ZCCM-IH 2023 Annual Report.

Zambia 2024 Mining Report - Third Edition PwC | 33

 Appendix 1 - 3 Million MT Copper
Output Target by 2031
Name of 2024 projected Trouble Expectded additional Total at full Mineral
company production (MT) shooting (MT) production from new capacity (MT)
investments (MT)

Lumwana Mine 150,000 - 140,000 290,000 Copper

Kalumibila Mine 265,000 - - 265,000 Copper

Kansanshi Mine 138,000 - 112,000 250,000 Copper

Lubambe Mine 20,000 - 18,000 38,000 Copper

Chibuluma Mine 3,500 - 500 4,000 Copper

Mopani Copper 60,000 140,000 - 200,000 Copper

Mine

NFCA Chambishi 70,100 - 25,100 95,200 Copper

mine

Sino Kasempa 450 - 1,250 1,700 Copper

Luanshya Copper 43,700 - 31,800 75,500 Copper

Mines

KCM 30,000 270,000 - 300,000 Copper

Kasisi Copper 550 - 1,450 2,000 Copper

Mine

Sino Metals 12,000 - - 12,000 Copper

Macrolink - - 12,000 12,000 Copper

Mimbula Minerals 10,000 - 40,000 50,000 Copper

(Moxico)

Mwembeshi - - 50,000 50,000 Copper

Resources

Kashime Copper - - 15,000 15,000 Copper

Kitumba - - 25,000 25,000 Copper

Changfa Resources - - 15,000 15,000 Copper

Limited

Total 803,300 410,000 487,100 1,700,400

Targeted production 3,000,000 Copper

by 2031 (MT)

Deficit- New (1,299,600) Copper

finds (MT)

Zambia 2024 Mining Report - Third Edition PwC | 34

 Contacts

Andrew Chibuye George Chitwa Charity Mulenga

Country Senior Partner Tax Services Leader Assurance Services Leader
+260 211 334 000 +260 211 334 000 +260 211 334 000
andrew.chibuye@pwc.com george.chitwa@pwc.com charity.mulenga@pwc.com

Malcolm Jhala Martin Bamukunde Lyndon Lane-Poole

Partner, Tax Services Partner, Assurance Services Partner, Consulting & Risk Services
+260 211 334 000 +260 211 334 000 +260 211 334 000
malcolm.jhala@pwc.com martin.x.bamukunde@pwc.com lyndon.l.lane-poole@pwc.com

Follow PwC Zambia on

Zambia 2024 Mining Report - Third Edition PwC | 35

www.pwc.com/zm

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