Copper mining and refining were the predominant components of Zambia’s mineral industry. Zambia also was a significant producer of cobalt and semiprecious gemstones, such as amethyst, beryl, and emerald. In 2009, Zambia’s mines accounted for an estimated 4% of the world’s total output of cobalt and copper (Edelstein, 2010; Shedd, 2010).
Minerals in the National Economy
In 2009, mining and quarrying accounted for about 8.9% of the real gross domestic product (at constant 1994 prices) compared with 8.2% in 2008. According to preliminary data, exports of cobalt and copper were valued at $3.3 billion in 2009 and accounted for 74% of Zambia’s merchandise exports (Bank of Zambia, 2010).
Government Policies and Programs
The mining sector is regulated primarily by Act No. 7 of 2008 (the Mines and Mineral Development Act of 2008). Uranium exploration and mining are regulated by the Mines and Minerals Development (Prospecting, Mining and Milling of Uranium Ores and Other Radioactive Mineral Ores) Regulations of 2008.
The Income Tax Act (Chapter 323 of the Laws of Zambia) and recent changes, such as the Income Tax (Amendment) Act of 2008 and Income Tax (Amendment) Act no. 27 of 2009, and the Mines and Minerals Development Act of 2008, address capital allowances, mineral royalties, mining development agreements, the variable profits tax, and the windfall tax. Investment in most types of mineral operations are covered by the Zambia Development Agency Act of 2006, although minerals produced for the construction industry, such as clay, sand, and most types of stone, are excluded. The Environmental Protection and Pollution Control Act of 1990 and its 1999 amendment address environmental issues, including those associated with the mining industry. Petroleum exploration and production are regulated by Act No. 10 of 2008 [the Petroleum (Exploration and Production) Act of 2008].
The Government, which was adversely affected by the loss of revenue from royalties and taxes when production was suspended by Luanshya Copper Mines Ltd. (LCM) in December 2008, proposed to increase its interest to 35% (from the current 10% to 15%) in the large copper mining enterprises that were owned primarily by international companies.
The Government felt that by having a larger stake in the companies, it would be able to influence company decisions, such as the protection of jobs during temporary suspensions of operations. In March, the Parliament agreed to abolish the 25% windfall tax on the value of produced base metals because of the decrease in international copper prices associated with global economic crisis. As metals prices increased in 2009, the Government was buffeted by calls by international monetary organizations for the Government to increase taxes on mineral operations and by mining organizations for it to decrease or let stand existing taxes (Mfula, 2009b; Shacinda, 2009c, d).
Notable increases in production were estimated for cement, copper anode, gemstones, gold, limestone, and silver. Production of cobalt, nickel, and sulfur, however, were estimated to have decreased significantly in 2009.
Structure of the Mineral Industry
Many of the country’s large mining operations are located in Copperbelt Province in north-central Zambia. The Government retains minority interest in most of the large copper projects through its holding company Zambia Consolidated Copper Mines Investments Holdings Plc (ZCCM-IH). The mining sector is administered by the Geological Survey Department, the Mines Development Department, and the Mines Safety Department of the Ministry of Mines and Minerals Development. The Ministry of Commerce, Trade and Industry oversees the industrial manufacturing sector.
In November, Total S.A. of France sold its 50% interest in the Indeni petroleum refinery to the Government. Copperbelt Energy Corporation Plc, which purchased most of its power from state-owned ZESCO Ltd., distributed electrical power to many of the larger mining operations.
Details by commodity are available in the full report on Zambia in the Mineral Yearbook by United States Geological Survey.