Zambia to Increase Stake in Foreign-Owned Mining Companies

5 November 2009 (Last Updated November 5th, 2009 18:30)

The Zambian Government says it will raise its stake in overseas mining companies from 10% to 35%. As part of its initiative, the government has raised its shareholding in the China Nonferrous Metal Mining Corporation's (CNMC) Luanshya copper mines to 20%. CNMC decided to make

The Zambian Government says it will raise its stake in overseas mining companies from 10% to 35%.

As part of its initiative, the government has raised its shareholding in the China Nonferrous Metal Mining Corporation's (CNMC) Luanshya copper mines to 20%.

CNMC decided to make a $400m investment in Luanshya Copper Mines in June 2009 after acquiring the mining company.

The funds will be used to resume operations at the Baluba mine and help develop the Mulyashi copper project.

The restart of the Baluba mine may enable rehiring of nearly 1,740 miners fired after the mine was put under maintenance in 2008.

Zambia's mining sector, which was impacted by low copper prices in the initial half of 2009, received a boost when Luanshya Copper Mines was sold to the Chinese company and the Chambishi Metals cobalt smelter announced that it would resume production shortly after.

Early this year, the government dismissed the windfall tax on minerals initiated in 2008 after overseas miners threatened to postpone projects and terminate jobs due to problems faced in raising investment.

Zambia has completed an amended mineral empowerment policy that will encourage Zambians to take more active participation in the mining sector.

The government also wants to generate more job opportunities by developing huge mining properties in all major provinces, which will reduce the uneven distribution of mining wealth.

The government has started pushing uranium exploration activity in southern Zambia and manganese exploration in the north and north-west parts of the country.