In Zambia’s North-Western Province, Kansanshi Mine stands tall as the country’s largest copper producer. But while copper dominates its output, it is gold — recovered as a by-product — that has become central to Zambia’s economic strategy.
For almost two decades, Kansanshi has poured its gold into doré bars, with the Bank of Zambia (BOZ) purchasing the metal to build national reserves. What once seemed like a secondary product has evolved into a pillar of macroeconomic resilience, strengthening the kwacha, supporting investor confidence, and attracting long-term global capital.
That strategic importance was reinforced on 7 August 2025, when Kansanshi Mining Plc renewed its agreement with the BOZ to supply gold doré for another three years.
From Copper Giant to National Gold Producer
Gold extraction at Kansanshi dates back to the early 1990s, when artisanal miners recovered small quantities from local deposits. With First Quantum Minerals’ investment in 2005, gold recovery was integrated into the mine’s modern copper circuits, creating a reliable flow of by-product gold.
Today, Kansanshi produces doré bars containing 94–97% purity, which are then refined to 99.995% before export. The BOZ purchases the metal at the London Bullion Market Association (LBMA) rate, with payment made in kwacha, ensuring foreign exchange remains inside Zambia.
Gold shipments move under a multi-agency security framework involving the Zambia Revenue Authority, Ministry of Mines, Office of the President – Special Division, Zambia Air Force, and Zambia Police, ensuring transparency and preventing illicit exports.
Building Zambia’s Reserves
The BOZ first signed an agreement with First Quantum in 2021 to buy locally produced gold as part of a strategy to diversify reserves. Since then, it has acquired 92,100 ounces (2.8 tonnes) from Kansanshi — about 61% of total doré output during the period.
The benefits to Zambia are broad:
- Reduced reliance on foreign currency reserves.
- Support for the kwacha, boosting confidence.
- A hedge against inflation and global shocks.
- A stronger financial reputation internationally.
- Assurance that part of Zambia’s gold remains within its borders.
When the initial three-year deal expired in December 2024, the BOZ opened a competitive tender. Kansanshi secured the renewal, committing to quarterly gold sales based on production forecasts. This year alone, Kansanshi expects to deliver 100,000–110,000 ounces of gold.
BOZ Governor Dr. Denny H. Kalyalya praised the continued partnership:
“We look forward to buying more gold from your esteemed firm. We have so far purchased about 2.8 metric tonnes of refined gold, and we aim for even greater reserves.”
Global Confidence: The Royal Gold Deal
In a separate development, just days before the BOZ contract renewal, First Quantum signed a $1 billion streaming agreement with U.S.-based Royal Gold Inc. — one of the largest such deals globally in a decade.
Under the agreement:
- Royal Gold provides $1 billion upfront in exchange for gold credits tied to Kansanshi’s copper production.
- Kansanshi retains control of physical gold until later stages.
- Zambia’s taxes, royalties, and revenues remain untouched.
- The deal spans the life of mine, ensuring financial stability.
- Royal Gold commits $4.5 million to community projects.
Dr. Godwin Beene, First Quantum’s Country Manager, stressed that Kansanshi can meet both BOZ and Royal Gold obligations:
“The commissioning of the S3 Expansion guarantees a steady input of gold-bearing ore. As far as production is concerned, there’s no cause for worry.”
Country Director Anthony Mukutuma called the deal a vote of confidence:
“This is the largest indirect investment of its kind globally in the last decade and a strong endorsement for continued investment in Zambia.”
Two Deals, One Strategy
The BOZ renewal and the Royal Gold streaming agreement represent a dual-track strategy: securing national reserves while attracting global capital for expansion.
- For Zambia, BOZ’s purchases guarantee a steady inflow of gold into national coffers.
- For First Quantum, Royal Gold’s upfront capital funds long-term stability and growth.
Together, they position Kansanshi’s gold not just as a copper by-product, but as a financial backbone for Zambia’s future.
Looking Ahead
Exploration has uncovered promising near-surface gold zones, while the S3 Expansion will boost throughput and extend Kansanshi’s operational life. Gold’s role in Zambia is set to deepen, providing both economic resilience and strategic independence in a volatile global economy.
As BOZ Governor Dr. Kalyalya noted, this is not just about contracts or ounces of gold — it is about building “a stronger, more self-reliant national economy.”
For a mine built on copper, Kansanshi’s golden legacy is proving equally significant — a thread woven into Zambia’s long-term prosperity.
