Zambia Investor Briefing: September 2024

Investor Briefing

9 Oct

OVERVIEW

MINING: Canadian mining firm Ivanhoe Mines has signed a Memorandum of Understanding (MoU) with the Zambian Government for exploration projects. Meanwhile, Barrick Gold plans to complete the feasibility study for its Lumwana mine expansion by year-end, with construction set for 2025.
RAIL: Africa Finance Corporation (AFC) has signed concession agreements with Angola and Zambia for the Zambia Lobito Rail Project. Also this month, President Hakainde Hichilema oversaw the signing of an MoU between China Railway Construction Limited, Zambia, and Tanzania to revitalise the Tanzania-Zambia Railway Authority (TAZARA) railway.
FDI: President Hichilema attended the 2024 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC). His trip focused on addressing Zambia's energy challenges, attracting investment, and strengthening Sino-Zambian relations.
WATCH: Sir Paul Collier, Professor of Economics and Public Policy at Oxford University’s Blavatnik School of Government, spoke to ZIB’s Choolwe Chibomba about investment opportunities in Zambia and what a potential second term for President Hichilema would mean for the Zambian economy. Chibomba also spoke to Renew Capital’s Lucas Robinson about his excitement regarding the vast opportunities available to invest within Zambia and the positive impact which government reforms are having on the investment climate.
COMING UP: ZDA Director General Albert Halwampa will be speaking at the Africa’s Financial Services Investment Conference (AFSIC) 2024 in London 7-9 October 2024. Halwampa will discuss investment opportunities available in Zambia including energy, agriculture, infrastructure development and manufacturing among others.

A CLOSER LOOK

Mining Developments

Canadian mining firm Ivanhoe Mines has signed a Memorandum of Understanding (MoU) with the Zambian Government, securing commitments for information sharing, identification of prospective land, access to geological data (including a new 750,000-km2 airborne geophysical survey), and support for new licence applications. The company has applied for a substantial exploration licence package in Zambia, with decisions expected by year-end. Ivanhoe co-chairperson Robert Friedland is confident in the potential for success for this new opportunity in Zambia: “We have high conviction that new discoveries are waiting to be uncovered”.

In other mining news, Barrick Gold plans to complete the feasibility study for its Lumwana mine expansion by year-end, with construction set for 2025. CEO Mark Bristow states this project will transform Lumwana into a top 25 copper producer and tier-one mine, better equipped for market volatility. The expansion aims to increase average copper production from 120,000 to 240,000 tonnes annually.

Elsewhere, Arc Minerals director and executive chairperson Nick von Schirnding praised President Hichilema on his administration’s achievements in implementing positive change in the mining sector since coming into office, which he described as “very impressive”. He said the UPND Government’s efforts to “turn this ship around” included “getting rid of the bad apples and sorting out historical corruption”. Von Schirnding also discussed Arc Minerals’ copper joint venture with Anglo American in Zambia, which he said remains firmly on track. The article was originally published in Miningmx’s The Mining Yearbook 2024.

Finally, Zambian mining companies have met with the government to discuss proposals that would potentially give the state a larger share of its mineral resources. In a joint press release, the Zambia Chamber of Mines said it was “committed to engaging with Government in finding solutions on policy and regulatory matters”. In a promising step for continued dialogue, the two parties have developed “a roadmap for the resolution of the matter within the shortest period of time” to ensure continued stability in the sector.

Rail Development Projects

Africa Finance Corporation (AFC) has signed concession agreements with Angola and Zambia for the Zambia Lobito Rail Project. The agreement was signed in a ceremony hosted by U.S. Secretary of State Antony J. Blinken during the UN General Assembly, and marks a significant step forward for the railway project. These agreements authorise AFC to finance, construct, own, and operate the railway, which involves the construction of about 800km of rail line connecting the Benguela line in Angola to the existing Zambian rail lines in Chingola. According to AFC president and CEO Samaila Zubairu, “The Zambia Lobito rail project represents a game-changing development for the region, unlocking tremendous potential for trade, industrialisation and socioeconomic growth”.

This follows weeks after the US’s announcement at the end of August of its readiness for “phase three” of its Lobito Corridor project, a rail line connecting the mining regions of northwestern Zambia and southern DRC to the Angolan port of Lobito on the Atlantic coast, and thereby to the global export market. Acting Special Coordinator for the Partnership of Global Infrastructure and Investment Helaina Matza announced, “From day one […] we knew that we wanted to continue the work to the Indian Ocean”, revealing President Biden’s administration’s ambitions to extend the line into East Africa.

The Lobito is not the only significant rail development project in the region. Earlier this month President Hichilema oversaw the signing of an MoU between China Railway Construction Limited, Zambia, and Tanzania to revitalise the Tanzania-Zambia Railway Authority (TAZARA) railway. In February, China proposed to spend $1 billion to rehabilitate the rail line through a public-private partnership model.

Forum on China-Africa Cooperation (FOCAC)

President Hichilema attended the 2024 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC). His trip focused on addressing Zambia's energy challenges, attracting investment, and strengthening Sino-Zambian relations. Beijing saw Hichilema engage in bilateral meetings with Chinese firms. China Non-Ferrous Mining Corporation (CNMC) and China Railway Construction Corporation (CRCC) pledged to expand their Zambian investments.

A pivotal meeting with President Xi Jinping reaffirmed the countries' long-standing cooperation. Discussions centred on boosting economic activity and China's support in energy, infrastructure, and mining sectors. The visit also included discussions with Liu Jiachao, Chinese Minister of International Department, about China's 10-point partnership plan with Africa and continued support for Zambia's infrastructure and debt restructuring.

In some good news for Zambia's energy sector three agreements were signed between ZESCO and Power China, including plans for rooftop solar projects and solar photovoltaic plants at Kariba North and Kafue Gorge Lower. An additional MoU between ZESCO and China Datang Corporation aims to diversify Zambia's energy mix beyond hydroelectricity. In another potential boost for Zambian energy, Hichilema met with LONGi Green Energy Technology Company in Xi’an to discuss solutions for Zambia's energy deficit. The company expressed willingness in collaborating on Zambia's short- and long-term energy mix programme.

LONG READS

The mining disruptors that could rock the industry (Investors’ Chronicle, 28.08.24)

China’s Xi Jinping courts African leaders to ward off geopolitical rivals (Financial Times, 04.09.24)

Investors and entrepreneurs collaborate in Zambia for social impact (Forbes, 18.09.24)

Samual Munzele Maimbo: SADC’s candidate for African Development Bank presidency (The Africa Report, 25.09.24)

The Mining Yearbook 2024 (Miningmx)

UPCOMING EVENTS

7-9 October - AFSIC Investing in Africa Conference and Expo London, UK

7-10 October - Green Energy Africa Summit Cape Town, South Africa

7-11 October - Zambia Mining and Investment Insaka Lusaka, Zambia

9-10 October - Zambia Impact Investment Summit Lusaka, Zambia

14-15 October - Brazil Africa Forum Sao Paulo, Brazil