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The public launch; a bold statement
On August 29, 2024, Zambia’s Minister of Mines and Mineral Development, Paul Kabuswe, launched an ambitious strategy aiming to boost the country’s copper production to 3 million tonnes (mt) by 2031. This comes at a time when Zambia, once a global leader in copper production, has seen its standing fall behind other nations. In this analysis, we will assess the feasibility of Zambia’s bold copper rebound strategy, the opportunities it must seize, the challenges that lie ahead, and the broader economic implications.
A Look Back at Zambia’s Copper Journey
To understand Zambia’s aspirations, it’s important to reflect on its historical position in global copper production. In the 1960s, Zambia was producing around 700,000 mt of copper annually, competing closely with Chile, which was then producing 600,000 mt. Fast forward to the 2000s, despite a global surge in commodity demand, Zambia’s copper output stagnated, hovering around 800,000 mt by 2024. Meanwhile, Chile surged ahead, averaging 5 million mt annually, and the Democratic Republic of Congo (DRC) reached 2 million mt per year. Now, Zambia is aiming to reclaim its competitive edge through a well-structured strategy designed to meet the growing demand for copper.
Seizing the Moment: The Global Copper Opportunity
The 3 million mt strategy is designed to stimulate investment in mining exploration, minerals processing, and the supply of goods and services. Copper has seen a resurgence in demand, driven by the global shift towards green energy and advancements in technology. The transition to renewable energy and the rise of electric vehicles have placed copper at the forefront, making it a critical material. According to the International Energy Agency’s (IEA) 2023 Critical Minerals Market Review, the energy sector has significantly boosted demand for minerals like cobalt, nickel, and copper. The market for these energy transition minerals was valued at USD 320 billion in 2022, with continued growth expected.
With Zambia’s abundant copper reserves, the nation is well-positioned to benefit from this global demand, potentially driving economic development, reducing poverty, and improving livelihoods through a revitalized mining sector.
The Multi-Pronged Strategy
Zambia’s 3 million mt copper strategy focuses on three key areas: brownfield, greenfield, and exploration projects. Major brownfield operations, such as Konkola Copper Mines (KCM) and Mopani Copper Mines, are expected to contribute 1.4 million mt by 2030. KCM is projected to reach 300,000 mt annually, while Mopani aims to double production to 230,000 mt. Although greenfield projects will contribute more modestly, they are expected to grow from 47,200 mt in 2023 to 254,280 mt by 2030. In addition, exploration efforts are anticipated to play a crucial role, adding over 1.2 million mt by 2030. A high-resolution aerial geophysical survey is also being conducted to uncover untapped reserves and attract further investment.
This approach reflects a strategic effort by the Zambian Government to not only scale up copper production but also explore new mineral resources to ensure sustainable, long-term growth in the mining sector.
The Potential Economic Impact
If Zambia’s strategy succeeds, the economic rewards could be substantial. Increased copper production would lead to higher foreign exchange earnings, boosted Government revenues, and job creation. The ripple effect could stimulate infrastructure development, strengthen supply chains, and create opportunities for local businesses.
With copper accounting for over 70% of Zambia’s total exports, higher production could increase foreign exchange inflows, supporting exchange rate stability for the Zambian kwacha. This would contribute to a broader macroeconomic stability. Achieving this goal would also help Zambia diversify its economy and reduce its reliance on copper exports, paving the way for more inclusive and sustainable growth.
Challenges on the Horizon
Despite the promising outlook, Zambia faces several challenges in executing its 3 million mt copper strategy. The country’s energy deficit is one of the most pressing issues, as Zambia relies heavily on hydroelectric power. To sustain mining operations, diversifying into renewable energy sources like solar and wind will be essential. Regulatory hurdles also pose a challenge. A more streamlined framework is needed to attract investors and ensure the timely execution of mining projects. The operationalization of the Minerals Regulation Commission will be crucial in this regard, ensuring transparency and the enforcement of high standards.
Tax justice remains a major challenge. Over the years, inadequate tax collection in Zambia’s mining sector has limited the Government’s ability to fund other development priorities. Establishing a fairer, more equitable, and effective tax system supported by stronger enforcement measures is essential to address this issue
Artisanal and small-scale mining (ASM) is another area that presents both opportunities and challenges. While ASM has the potential to contribute significantly to copper production, many small-scale miners lack access to capital, technology, and regulatory support. Addressing these issues could unlock further growth in Zambia’s mining sector. Additionally, the nation must balance increased production with value addition and sustainable mining practices to maximize long-term benefits and minimize environmental impact.
Stakeholders and Critical Success Factors
The success of the 3 million mt strategy will depend on coordinated efforts from key stakeholders. Zambia Consolidated Copper Mines-Investment Holdings (ZCCM-IH), the Government’s mining arm, will play a crucial role in driving this agenda. Private international mining companies, which currently dominate production, are also expected to expand their operations in line with the strategy.
Critical to the success of the plan will be investing in energy diversification to ensure a reliable power supply, streamlining regulatory processes to avoid project delays, and adopting advanced mining technologies to boost productivity. Establishing a strong Minerals Regulation Commission will enhance regulatory efficiency and transparency, further supporting the growth of Zambia’s mining sector.
Conclusion: A New Era for Zambia’s Copper Industry
Zambia’s 3 million mt copper production strategy is ambitious, but achievable. By capitalizing on the global copper boom and making targeted investments in brownfield and greenfield projects, Zambia has the potential to re-emerge as a leading copper producer. However, timing is crucial. With global demand for copper soaring, now is the moment for Zambia to act decisively and not only position itself as a top player in the copper market once again but industrialize its economy.
By Emmanuel Muma
Research Fellow Trade and Investment
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