The Zambian Cabinet has approved the creation of a special purpose vehicle (SPV) to boost the country’s revenue from its mineral resources, according to a Reuters report.
The Cabinet announced that this new entity will facilitate a shift from the current dividend payment model for mineral resources to a production-based sharing mechanism. This change aims to ensure that the benefits from mineral resources extend beyond statutory obligations and reach the people of Zambia.
Under this new model, the government will be able to share in the production of minerals and negotiate their prices. The Cabinet emphasized that the SPV will help ensure accurate declarations of mineral consignments for both export and domestic use.
Presently, the government’s mining interests are managed through ZCCM Investment Holdings. The company recently sold a 51% stake in Mopani Copper Mines to a subsidiary of the UAE-based International Holding Company, retaining the remaining stake.
Earlier this year, Mines Minister Paul Kabuswe told Reuters that the government seeks to acquire larger stakes in new mining projects to boost state revenue and encourage investment in social initiatives.
In 2023, Zambia’s copper production was 698,000 tonnes, down from 763,000 tonnes the previous year. Despite this decline, Zambia has set an ambitious goal of increasing annual copper output to three million tonnes within the next decade, driven by rising demand from the electricity and construction sectors.
