Thursday, July 25, 2024

Is the New Mining SPV a Duplicate of ZCCM?

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By Gregory Mofu

On June 11, 2024, the Zambian government took a significant step towards reforming the mining industry. At the 11th Special Cabinet Meeting held at State House, President Hakainde Hichilema chaired a resolution to establish a Special Purpose Vehicle (SPV) for investment and trading in mineral resources.

The move aims to address the limitations of the current divided payment model for mineral resources. By adopting a production-based sharing mechanism, the government seeks to ensure that the benefits of mining accrue to the Zambian people. The new business model will allow for actual sharing of minerals produced, government-negotiated prices, and guaranteed revenue for the sale of minerals.

While some may view the SPV as a duplicate of Zambia Consolidated Copper Mine (ZCCM), it is designed to learn from ZCCM’s legacy issues and failures. The government acknowledges that ZCCM has struggled to function effectively, particularly in the face of the evolving mining landscape. By establishing the SPV, the government hopes to create a more effective and efficient vehicle for investment in the mining sector.

However, the government must ensure that the SPV does not compete with small-scale local miners. Instead, it should focus on partnerships and empowerment to support the growth of the industry. Additionally, investing in research and development will be crucial to unlocking the full potential of the mining sector.

Details on how the SPV will operate, particularly in terms of investing in projects as equity partners, remain scarce. Mining is a capital-intensive industry, and it is unclear how the SPV will navigate this challenge. Further information is needed to understand the SPV’s role in project financing and its potential impact on the industry.

In conclusion, the establishment of the SPV marks a significant shift in Zambia’s approach to the mining industry. While it may share similarities with ZCCM, the SPV presents a better vision for the future of Mining in Zambia. The SPV is not a duplicate of ZCCM, but rather a new entity designed to address the limitations of the current mining industry. The SPV marks a significant shift in Zambia’s approach to the Mining Industry, presenting a better vision for the future of mining in Zambia.

9 COMMENTS

  1. They’re going back to the same mineral royalty that they abolished not long ago. It’s good that they’ve realized their mistake although the nation has already lost a lot in terms of revenue. Just be magnanimous enough and accept your mistake. There’s no need to establish a Special Purpose Vehicle. It’s just a duplication of functions

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    • Who abolished it?
      In life try learn from the past , don’t live in it but look to the future. Whatever happened in the past will never come back. Let’s move on. Copper prices are picking up and it’s time we re invested into the Copper indusrtiies.

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  2. This just another useless pronouncement. HHe is busy giving mineral for free to his friends while showing Zambians a smoke screen. How many pronouncements he made that have ended on a piece of paper. This stop making pronouncements and get to work.

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  3. This will just be another money guzzling parastatal. Declaring losses year in and year out. zccm-ih has been ruined by politicians and lawyers. The lethargy and sheer indiscipline in the firm is depressing. They cannot even run a simple quarry at Ndola Lime. The late Francis Kaunda managed the firm albeit with problems from 1974 (NCCM) and later ZCCM 1980 to 1991. But we keep changing CEOs like underpants. I am averse to this idea of parastatals/IDC. Our culture and very very weak laws are a killer. The case of a KCM liquidator who was meant to save the company but ended up “raping” it, is a case in point.

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    • It is evident that you and I are from the same generation. I see your concern and totally agree your view of our poor working culture. How we need radical people like Burkina Fasso President Capt. Ibrahim Traoré to change the economy of Zambia. We are very soft and good to foreign investors but very harsh and cruel to ourselves.

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