Zambia Investor Briefing: November 2023
OVERVIEW
• Zambia has selected the UAE’s International Resource Holdings (IRH) as the new strategic equity partner in Mopani Copper Mines, according to the mine’s owner ZCCM. IRH is linked to Abu Dhabi’s most valuable listed company, International Holdings Company (IHC). Mines Minister Paul Kabuswe has said details of IRH’s investment and level of equity participation in Mopani will be revealed when negotiations are complete. It is expected to invest funds into the mine to help with short-term working capital and to finance the completion of the mine development. IRH will also work to “reset” Mopani’s existing relationship with Swiss mining conglomerate Glencore. This is good news for Zambia, which has been searching for a new investor in Mopani since the state took control of the assets from Glencore in 2021.
• Zambia has experienced a significant setback in its debt restructuring process after its official creditors, led by China, rejected a deal of almost $4 billion, despite approval in principle by the IMF. According to the finance ministry, the Zambian government “currently does not have the support” of official creditors and is “unable to move forward at this time” on a deal with bondholders. This is disappointing news, especially following October’s reports that Zambia had reached a huge milestone in its debt restructuring process. Despite this, however, the IMF has grounds for optimism that key lenders will still agree to a restructuring deal. Finance Minister Situmbeko Musokotwane has said Zambia hopes to complete the restructuring “as soon as possible” and is engaging closely with all creditors.
• President Hakainde Hichilema travelled to Italy on a two-day state visit to strengthen bilateral relations between the two countries. While there, he met the country’s president, Sergio Mattarella, with whom he discussed future opportunities to enhance Zambian development by means of alliances with Italian businesses, particularly in the industries of agriculture, mining, energy and tourism. Among the highlights of the Zambian president’s visit was his delivery of the keynote address at the Zambian-Italian Business Forum in Rome.
• Hichilema embarked on a trip to Germany where he undertook extensive economic diplomacy engagements. This included the G20 Compact with Africa, where he addressed a delegation of industry leaders in Germany. On the margins, he held bilateral talks with German Chancellor Olaf Scholz regarding the investment of German businesses in the Zambian agricultural sector.
• During his trip to Germany, Hichilema held bilateral meetings with the president of the World Bank Ajay Banga, and the IMF Managing Director Kristalina Georgieva. Both talks were focused on the need for a swift resolution to the remaining elements of Zambia’s debt restructuring programme.
• The Africa Fintech Summit was hosted this month in Lusaka. It brought together industry leaders, policymakers, investors, and entrepreneurs to explore the opportunities and challenges of the future of fintech on the continent. Technology and Science Minister Felix Mutati announced at the Summit Zambia’s plans to open a new smartphone factory by June 2024, which he hopes will “foster inclusivity when it comes to connectivity” and boost the reach of fintech startups in the country.
• According the Tanzania-Zambia railway authority, the Chinese government has asked China Railway Construction Corp., a state-owned firm, to negotiate a concession to operate a railway line connecting Zambia with the port of Dar es Salaam in Tanzania. The authority plans to revive the Tazara railway, which has fallen into disrepair in past decades but originally had a capacity of about five million tons per year. It has been a big year for Zambian rail networks: the US and EU have pledged to support the development of the Lobito Corridor, which will connect the Copperbelt region in Zambia and the DRC to Angola’s port of Lobito.
• Hichilema commissioned the Kasama Airport in the Northern Province. It is hoped the airport will serve as a “key hub for economic expansion in the northern circuit”.
Zambia Selects UAE’s IRH as New Partner for Mopani
Zambia has selected the UAE’s International Resource Holdings (IRH) as the new strategic equity partner in Mopani Copper Mines, according to the mine’s owner ZCCM. IRH is linked to Abu Dhabi’s most valuable listed company, International Holdings Company (IHC). This development signals the end to the speculation as to who would be Mopani’s investor, with South Africa’s Sibanye Stillwater and China’s Zijin previously in the running.
Mines Minister Paul Kabuswe has said details of IRH’s investment and level of equity participation in Mopani will be revealed when negotiations are complete. It is expected to invest funds into the mine to help with short-term working capital and to finance the completion of the mine development. IRH is also expected to “reset” Mopani’s existing relationship with Glencore.
The partnership is expected to increase copper production at the mine to more than 200,000 metric tons per annum, according to ZCCM. It has previously said Mopani would require $300 million in investment to expand output over the next three years, with an extra $150 million to sustain its operations.
This is good news for Zambia, which has been searching for a new investor in Mopani since the previous government took control of the assets from Glencore in 2021 and agreed to pay the company $1.5 billion in a deal funded by debt. According to ZCCM: “The proposed investment in Mopani is the largest single investment to date by IRH and represents a key step in the development of its strategy to become a major player in the African minerals sector”.
Hichilema Visits Italy to Strengthen Bilateral Ties
President Hakainde Hichilema travelled to Italy on a two-day state visit to strengthen bilateral relations between the two countries. While there, he met the country’s president, Sergio Mattarella, with whom he discussed future opportunities to enhance Zambian development by means of alliances with Italian businesses, particularly in the industries of agriculture, mining, energy and tourism.
Among the highlights of the Zambian president’s visit was his delivery of the keynote address at the Zambian-Italian Business Forum in Rome. Sponsored by the Zambian Chamber of Commerce and supported by the Zambian Development Agency (ZDA), the forum was attended by both Zambian and Italian companies.
While in Italy, Hichilema also met with both Qu Dongyu, Director-General of the Food and Agriculture Organization (FAO) and Alvaro Lario, President of the International Fund for Agricultural Development (IFAD) to discuss food and nutrition security in Zambia.
OTHER NEWS
The US and EU plan $1 billion-plus Africa rail link for key minerals 01.11.23, Bloomberg
Remittance fintech app Minit Money launches money sending to Zambia 3.11.23, Fintech Finance News
Zambia’s president calls for more bilateral cooperation with Türkiye 08.11.23, AA
Anglo starts exploratory drilling on copper licences in Zambia 13.11.23, Mining Weekly
What’s in store for China-Africa relations in 2024? 27.11.23, African Business
Koryx Copper starts a geophysical survey in Zambia 29.11.23, Yahoo Finance
UPCOMING EVENTS
SuperReturn Africa 2023 - 04-06.12.23, Cape Town, South Africa
COP28 Networking Reception – Invest Africa - 05.12.23, Dubai, UAE