CMZ 2021 President Dr Godwin Mooba Beene outlines ‘The Zambian Mining Sector – The Next Ten Years’

Notice: Undefined index: catFilterList in /home/zambi/public_html/wp-content/plugins/wp-likes/api.php on line 243

CHAMBER OF MINES ZAMBIA PRESS BRIEFING

Thursday 8th April 2021

LUSAKA, ZAMBIA

 

THE ZAMBIAN MINING SECTOR – THE NEXT TEN YEARS

 

SALUTATIONS

KEY STATEMENT

The Mining Industry remains the major influencer of the temperature of Zambia’s economy.

It attracts and in turn influences practically all aspects of the Zambian economic activities.

It provides a platform for the country’s industrialization. It remains a critical economic sector.

PURPOSE OF TODAY’S PRESS CONFERENCE

• To Communicate how we see the industry in the next ten years and beyond.
• To communicate how the CMZ will continue to help foster the much needed growth.

To achieve this, we will continue to engage with all stakeholders to make our Mining Sector competitive again, attract new investors and motivate continued investment by the existing investors, the ones who have boldly weathered world economic storms and stayed in the Zambian Mining sector since year 2000.

Let us start by taking a cursory look at the Industry Globally in terms of Production, Metal Demand and Metal Prices. So, where are we with Mining?

Our Position amongst the top ten world produces remains at the bottom.

And we are still lagging behind the DRC in Africa – but we can explain this. The DRC has a greater proven and mineable resource than us.

With this in view, what should we be doing?

Let us take advantage of the recent rise in demand for metal, which demand is likely to continue to rise. This is being caused:

In the Short Term – by Western and Chinese governments’ resolve to stimulate their economies in the wake of COVID-19.

In the long term, as the world retires hydrocarbons – by the switch to electrical vehicles for mobility. The upswing in demand presents growth opportunity for copper mining in Zambia.

What is the Investors’ and Host Countries’ take here?

In the wake of a growing demand for metal, Investors are seeing opportunities to invest if the Host Countries permit it. That permit comes in the form of enabling policies and fiscal regimes which:

• focus in the long term.
• fuel growth.
• provide a parachute in the advent of a crash in the business – metal price and demand.
• provide for a safe and secure working and investment climate
• provide a win-win environment.

For many Host Countries, Zambia included, this is the time to grant that permit and enable the much needed Foreign Direct Investment inflows – for some, to recover and still for some, an opportunity to grow their economies.

The Chamber of Mines will remain focused on the issues that permit investment in the whole Mining Sector.

We are duty bound to remain steadfast in our engagement with Government and all stake holders in the sector because Mining is still the engine of our country’s economy.

How shall we do this?

It is required that we:

1. Support the whole mining activity from Artisanal to Large Scale.

While all eyes are on the Large Scale Miners, we must not neglect the Artisanal and Small Scale Sector, our members in AZMEC.

This sector has the potential to contribute a significant production if properly regulated and managed.

2. Promote geo-mapping and exploration: We need to be sure of the nation’s metal resources, enter into a league of metal producers and stay on top in that league.
3. address impediments to investment inflows, production growth, willing to learn on experiences of others. Top at the list of the impediments is Policy instability.
4. Addressing Bad public perception of the Industry. Our sector, like any other sector that thrives on engagement with foreigners is sensitive to public perception. Since the year 2000 when Zambia’s investment policy changed, the new Mining Sector has been battling a bad press leading to Government putting various measures in place to address complaints from watchdog groups. Some potential investors have found reason for not wanting to invest in the Zambian Mining Sector.

We think time is now to take a fair view of the industry which remains the engine of our country’s economy, has vested largely well in the communities, and supports government development efforts. Zambia joined EITI in 2009 to demonstrate transparency in the Mining Industry. This move got whole support of three parties which make up ZEITI – the Mining Industry, the CSOs and GRZ ( the chair of the ZEITI). We urge the public to direct the issues of opaqueness in the Mining Industry to ZEITI and challenge this organization prove there is transparency in the Industry. . We therefore urge commentators that  rather than the meme-driven   reproach  that is thin on fact ,     constructive criticism based on data and historical fact will be a welcome asset in our common effort  to attract and not repel investment .

 THE RELAY RACE BATTON

The out-going President of the Chamber has handed over to me four tasks which we will continue to engage Government over and these are:

1. Removal of Non- deductibility of the Mineral Royalty Tax (MRT). This is a punitive tax which is deterring future investment in the sector.
2. Changes to the Mineral Royalty Sliding scale. The problem we are facing here is that royalty charged to the mines at every price trigger are very high compared to peer jurisdictions. We are however confident that the recent involvement of government in the sector, running two large scale mines will offer an opportunity to resolve this matter.
3. The framework for setting electricity tariffs within the mining sector remains opaque and largely driven by ZESCO. A process to determine the cost of supply was commenced by the Energy Regulation Board. We are concerned that this process remains protracted. We wish to see it concluded and set a foundation for setting truly cos-effective tariffs.
4. The Proposed enactment of a local content policy statutory instrument. We will continue to engage the Ministry of Mines to help steer the reform to a more realistic and acceptable method of increasing participation of local suppliers and contractors in the Zambian value chain. The concept of local content is not new to Zambia and many will appreciate that most of the industries on the Copperbelt, some of them still operating today were set up under the auspices of local content. As long as the Copperbelt Mines were thriving, those industries stayed in business without adversely affecting the cost of production of copper. We thus have a model that worked before and need not re-invent the wheel in the present.

CLOSURE

The Chamber of Mines will continue to play its role for the Ministry of Mines to attract and keep the investor by pointing out to government and stakeholders the impediments to investment and growth in the sector, alert the Ministry of Mines of the emerging opportunities and trends in the industry and foster transparency under the EITI umbrella. We hope the Ministry will look after us, to keep our activities aligned to policy and regulations and encourage efficiency and stewardship. We have a common strategy for the sector. Our efforts can only be, but complimentary

Our Copperbelt Mines hold a good grade of copper, but they are deep and old and costly. The newer open pit mines are of low grade, requiring to move huge tonnages of material to produce a ton of metal.

Knowing our resources (quantity and character) and the state of mines assists greatly with policy making. We must continue to attract the willing investors to keep on developing these resources in the face of increasing appetite for metal, keep our people in employment, supporting local business and invest in the social sector.

We deem the coming years to be exciting for our sector, an opportunity for the willing and able investor, local or foreign to take the high road. We also envisage Zambian Business people to take opportunity and invest, building production line that will serve the Mining Industry.

I thank you.

Dr Godwin Mooba Beene (Dr)

President – CMZ 2021