In Zambia’s North-Western Province, Kansanshi Mine has long been known as the country’s copper powerhouse. Yet, in recent years, it is gold—produced as a by-product of copper—that has become a cornerstone of Zambia’s economic strategy and financial resilience.
Gold at the Heart of National Reserves
Since 2021, Kansanshi has supplied gold doré bars to the Bank of Zambia (BOZ), helping the central bank build national reserves, strengthen the kwacha, and safeguard the economy against inflation.
On 7 August 2025, this strategic role was reinforced as Kansanshi Mining Plc, owned by First Quantum Minerals, renewed its gold supply agreement with the BOZ for another three years.
BOZ Governor Dr. Denny H. Kalyalya hailed the partnership:
“We have so far purchased about 2.8 metric tonnes of refined gold, and we aim for even greater reserves.”
From Copper Giant to Gold Producer
While Kansanshi’s vast processing plants are designed for copper, its integration of gold recovery since 2005 has turned doré production into a steady by-product business.
Each bar—containing 94–97% purity—is transferred to BOZ under strict oversight involving five government agencies, from the Zambia Revenue Authority to the Air Force. The bars are later refined to 99.995% purity and exported under tight regulation.
This system ensures transparency, prevents illegal exports, and secures Zambia’s control over one of its most valuable resources.
Boosting the Economy
Gold sales to BOZ are settled at the London Bullion Market Association (LBMA) price, but paid in kwacha, ensuring foreign exchange stays in Zambia.
The benefits are significant:
- Reduces reliance on external currency reserves.
- Supports the kwacha and boosts investor confidence.
- Enhances Zambia’s global financial credibility.
- Ensures part of the country’s gold stays at home.
In total, 92,100 ounces of refined gold—about 61% of Kansanshi’s doré output since 2021—has already been added to Zambia’s official reserves.
A $1 Billion Streaming Deal
Just days before the BOZ renewal, First Quantum announced a $1 billion streaming agreement with Royal Gold Inc. of the U.S.—one of the largest deals of its kind globally in the past decade.
Key features:
- A $1 billion upfront payment for future gold credits tied to Kansanshi’s copper output.
- Zambia’s taxes, royalties, and revenues remain intact.
- No immediate delivery of physical gold; Kansanshi retains production control.
- A $4.5 million contribution to community projects.
First Quantum executives stressed the mine’s capacity to meet both the BOZ and Royal Gold commitments. The S3 Expansion is expected to boost ore throughput, guaranteeing a reliable flow of gold-bearing material.
“This arrangement keeps a good percentage of the gold in Zambia,” noted Dr. Godwin Beene, First Quantum’s Country Manager.
“It strengthens the treasury and benefits the nation—not just our immediate communities.”
Dual Strategy for National Growth
Taken together, the BOZ and Royal Gold agreements illustrate a two-pronged strategy:
- For Zambia: steady inflows of gold into national reserves, shoring up economic stability.
- For First Quantum: upfront capital to fund expansion while retaining long-term production rights.
Looking Ahead
Kansanshi’s gold story is just beginning. The S3 Expansion and ongoing exploration of near-surface gold zones are expected to extend the mine’s golden legacy well beyond its copper foundations.
For Zambia, this means more than metal—it’s about building resilience. As BOZ Governor Kalyalya summed up, Kansanshi’s gold represents “a stronger, more self-reliant national economy.”
In an uncertain global market, Zambia is ensuring that this golden thread remains firmly woven into the fabric of its future.
