Copper and cobalt are the key commodities produced by Zambia, with the Zambian copperbelt remaining the focus of mining and development activities. The copperbelt, which is situated between Zambia and the DRC is one of the world’s greatest metallogenic provinces. It is estimated to contain 34% and 10% of global cobalt and copper reserves. The area contains the world’s highest grade copper and cobalt deposits, with tailings dumps often containing grades greater than that of most hard rock mines.

Zambia contains small-scale gold, coal and manganese mines. Outside of the copperbelt, little exploration has been carried out, apart from regional base metal, gold and diamond prospecting.

Apart from the Dunrobin gold mine and Maamba colliery, there are no other major mining operations outside of the copperbelt. The DunRobin gold mine situated some 120 km west of Lusaka in central Zambia, is owned by Anglo American and is ramping up production to a target of 567 kg/year with a three year life of mine.

Although the country has a diverse range of mineral resources, Zambia’s mining industry have been primarily focused on copper, lead, zinc, silver, gold and cobalt mining.

In line with its stated Mining Policy, the Government of Zambia has enacted new legislation – the Mines and Minerals Act (1995) – which greatly simplifies licensing procedures, places minimum reasonable constraints on prospecting and mining activities, and creates a very favourable investment environment, whilst allowing for international arbitration to be written into development agreements, should this be deemed necessary. A framework for responsible development has also been created through publication of the Environmental Protection and Pollution Control (Environmental Impact Assessment) Regulations, 1997. This is achieved by enshrining in the legislation the following basic assurances that the foreign investor expects:

  • Secure title to mining rights
  • Stability of the fiscal regime
  • Foreign exchange retention
  • Right to market mine products
  • Right to assign (right to trade the mining right)
  • Stability in environmental management
  • International arbitration
  • Freedom of commercial operation

The Government policy is not to participate in exploration or other mining activities or any shareholding other than regulatory and promotional role. Minerals in the ground are vested in the President on behalf of the state. The right to explore or produce minerals is authorised by a licence granted under the Mines and Minerals Act.

Besides a reconnaissance permit which is issued for a maximum of three months and is non-renewable (fees range from 4000 to 8000ZK) there are three categories of mining investments which have been identified in the new mining policy.

Large Scale Mining Operations

Prospecting Licence

  • No distinction is made between a Prospecting and Exploration Licence. Only one licence is renewable with relinquishments of at least 50% of the area at each stage.
  • Initial grant will be two years renewable for successive periods of two years each. The Minister may further renew the licence in order for the holder to complete the feasibility study.
  • The prospecting licence obliges the licence holder to adhere to agreed programme of work; financial commitment; employment and training of Zambians.
  • In carrying out these obligations the mineral rights holder has exclusive rights for mineral prospecting operations in the area. Quarterly and annual reports must be submitted in addition to geological reports at the end of the licence period.

Overview of types of Prospecting Licences:

Precious Minerals (diamonds, emeralds and ruby)

-Basic Licence fee=ZK20,000

-Area Charges=ZK1000/ha

-For each additional precious mineral=ZK1000/ha/year

-For each additional semi-precious mineral=ZK800/ha/year

-For each additional mineral (other than precious or semi-precious)=ZK400/ha/year.

Semi-precious Minerals (amethysts, aquamarine, tourmaline etc.)

-Basic Licence fee=ZK10,000

-Area Charges=ZK600/ha/year

-For each additional mineral=ZK600/ha/year

Any Other Minerals:

-Basic Licence fee=ZK4000

-Area Charges (other than precious and semi-precious)=ZK400/km2/year

-For each additional minerals (other than precious and semi-precious)=ZK400/km2/year

Precious Minerals

– Basic Licence fee=ZK80,000.

– Area Charges=ZK2000/ha.

– For each additional precious mineral=ZK2000/ha/y.

– For each additional semi-precious mineral=ZK1000/ha/y.

– For each additional mineral (other than precious or semi-precious)=ZK400/ha/year.

Semiprecious Minerals

– Basic Licence fee=ZK40,000.

– Area Charges per hectare per year=ZK1000/ha.

– For each additional mineral for semiprecious minerals=ZK1000/ha/y.

Any Other Minerals

– Basic Licence fee=ZK4000.

– Area Charges=ZK800/km2/year.

– For each additional mineral (other than precious and semi-precious)=ZK800/km2/year.

The holder of a prospecting licence has the right to apply for and be granted a Special Mining Licence for mining within the prospecting area, upon fulfilling certain conditions. Monthly returns, quarterly and annual reports are required.

Retention Licence

The holder of a prospecting licence may apply for a retention licence if he identifies a deposit of potential commercial interest or when a deposit cannot meet adverse market conditions or other economic factors of a temporary character.The duration of the retention licence is three years, renewable for a single period of three years.

Special Mining Licence

The holder of the prospecting licence is entitled to a Special Mining Licence.A person who is not a holder of prospecting licence may apply for Special Mining Licence over a vacant area. The duration of the Special Mining Licence is 25 years renewable for 25 years. Monthly returns, quarterly and annual reports are required. This application is to be accompanied by:

– Proposed programme of mining operations.

– Applicable environmental protection plan.

– Proposal for the employment and training of citizens of Zambia.

– Mining Development Agreement. A model Mining Development Agreement has been proposed.

The Special Mining Licence cannot be withdrawn once granted except on specified grounds clearly spelt out in the law and adequate accepted procedures followed.The holder of the Mining Lease has the exclusive right subject to the act, regulations and conditions in the licence to carry on all operations in accordance with the programme of mining operations and environmental plans.

ENVIRONMENTAL REGULATIONS

The Government of Zambia has an Environmental Protection and Pollution Control Act and a number of sectoral laws and regulations. A framework for responsible development has been created through the publication of the Environmental Protection and Pollution Control (Environmental Impact Assessment) Regulations 1997.

Environmental Framework

Key steps in establishing a project as laid down by the 1997 regulations are:

  • Preparation of a project brief to the Director of Mines Safety describing the site, proposed activities, and all aspects of potential environmental impact.
  • The Director may request more information or can forward the project brief to the Environmental Council of Zambia recommending one of : rejection; acceptance after submission of a full Environmental Impact Statement; the project be accepted and allowed to proceed immediately.
  • Preparation of an Environmental Impact Statement and submission to the Director of Mines Safety.
  • The Director of Mines Safety submits his recommendations to the Environmental Council which makes the final decision.
  • Environmental Impact Statements, if called for, to be updated annually or within fifteen months of the first statement.
  • Environmental audits of projects to be completed annually.
  • If a developer finds the provisions of any regulation unduly onerous, he may apply to the Minister or Director of Mines Safety for an exemption from that regulation. The exemption may be granted under prescribed conditions.
  • Developers of large-scale mining projects to contribute to the Environmental Management Fund for rehabilitation purposes.

Shaun Bakamoso

Greetings. I'm Shaun Bakamoso, and I'm thrilled to be your guide through the dynamic world of business news in South Africa here at mbendi.co.za. With a passion for staying informed and a keen interest in the ever-evolving landscape of business, I've dedicated myself to providing you with timely, insightful, and comprehensive coverage of the latest developments impacting the South African economy. bakamoso@gmail.com / Instagram