The Zambian mining industry has been faced with several challenges of late, particularly in the years leading up to the election of President Hakainde Hichilema in August 2021. Due to the detrimental fiscal policies of the Zambian government on the mining industry, Zambia has faced many challenges despite previously being heralded as one of Africa’s top producers of copper and cobalt. Fortunately, however, a new dawn emerged with Hichilema’s leadership, bringing hope to the mining sector and a potential way out of the country’s debt crisis.

Hichilema set the ambitious goal of expanding Zambia’s copper production from 800,000 to 3 million tonnes per year over the next decade. To achieve this, the government initiated policy changes to create a favorable environment for mining and investment. The mining tax framework underwent a review, stabilizing and streamlining taxation while eliminating double taxation. Moreover, the government has displayed its commitment to boosting investment across the mining value chain by signing a memorandum of understanding (MOU) with the Democratic Republic of Congo (DRC) to build a regional value chain for electric vehicle (EV) batteries.

These positive steps have led to increased mining investment in Zambia. In this regard, it is noteworthy that Quantum Minerals announced a $1.3 billion investment for copper production and a nickel mine in Zambia. Barrick Gold further expanded production, capitalizing on the revised tax regime to extend the life of the Lumwana mine.

While progress has been made, Zambia requires significant new investments to achieve its lofty copper targets. In its pursuit to producing 3 million tonnes of copper in the next decade, Zambia could benefit from leveraging digital technology, managing its risks and strengthening infrastructure.

In respect of leveraging digital technology, it is noteworthy that the U.S.-Africa Leaders Summit demonstrated a commitment from the U.S. to support the agreement between Zambia and the DRC for a mine-to-assembly EV-battery value chain. AI and machine learning can also play a pivotal role in exploration, reducing costs, and accelerating the identification of deposits. A firm using AI for this purpose announced a $150 million investment in a copper mine in Zambia, showcasing the potential for this approach to be replicated in other mines in the region.

Furthermore, policy changes can significantly alter risk perceptions. Zambia went from being perceived as “too risky” to an attractive mining jurisdiction in just two years. To maintain this positive trajectory, the government must sustain conducive policies to prevent divestment and attract new investments. Stability will yield substantial long-term returns. The unresolved debt default, however, continues to hamper broader investment in Zambia, emphasizing the importance of sound fiscal policy decision-making.

Finally, Zambia’s mining sector and overall economy are hindered by inadequate infrastructure. Leveraging donor funding and concessional financing could help address this constraint. Initiatives such as the Partnership for Global Infrastructure and Investment (PGII) provide an opportunity for Zambia to obtain the required funding for infrastructure development.

By implementing these principles, Zambia could not only become one of the world’s largest copper producers but could also support the regional development of the EV battery value chain. Other resource-rich African countries can learn from Zambia’s example and leverage their mining sectors for growth and fiscal sustainability. The journey may be challenging, but it’s never too late to seize the potential within the mining industry. Zambia’s story proves that a brighter future is possible with the right strategy and determination.