Surveys for this new phase of exploration will be completed in 2016.
Zambia’s mining operations have been predominantly focused on the Copperbelt region, but due to its abundance of mineral wealth the country is keen on diversifying its focus. What else does the ministry hope to develop?
Hon. Christopher Yaluma (CY): Zambia has been mining copper for over eighty years, and the ministry realizes that this will eventually be a diminishing asset. The long list of minerals resident in Zambian soil includes nickel, iron, uranium, precious stones, vast deposits of manganese, and gold. Diversification is still in the exploration stage, as aeronautical surveys from border to border will ensure that we have the best data for interpretation. Surveys will be completed before the close of 2016. We will fly over current operations to ensure that nothing was missed. The Ministry recognizes that investors are looking for accurate and up to date information, and we aim to ease their decision-making.
Zambia still has tracks of copper that are quite good, with a variety of grades, and our attention has been shifted to the northwest. There lies what I believe to be the new copper belt of Zambia. Mining development is picking up in the northwest, not only in regard to copper, but amethyst, emeralds, and aquamarines as well. Zambia intends to completely diversify and venture where we have not ventured before.
A great challenge for a majority of Zambian miners includes low commodity prices and nuanced power problems. How is the government working with the industry to keep mines operating in spite of the difficult environment?
CY: Earlier in 2015 the Ministry sat down with the miners to discuss the terms of royalty rates, and we truthfully negotiated a final decision. There was uncertainty in the regulation, which slowed production for a period, but we are now on agreeable terms and striding forward. Next year we aim to outperform the DRC, as Kansanshi and Kalumbila, have just been commissioned. Zambia is ready to show our superiority when it comes to mining.
Power problems have been serious as Mother Nature, and climate change, left us with low water levels in the Zambezi river basin. The Kariba hydro plant has about three to four months left of power generation, and we are working to prolong that period. Regulations and restrictions of water inflow into the turbines have been put in place, as full generation would dry up the basin completely. Zambia is importing 100 megawatts (MW) from Mozambique, another 148 MW from a gas powered private producer, and from the power ship that docks in Mozambique in January 2016. There is certainly a plan in place for the short-term, and the long-term solution is solidifying as well.
What does the long-term power-generation plan encompass, and when will miners reap its benefits?
CY: Zambia’s coal fired power station, Maamba Collieries, will be completed in January 2016 and will provide an additional 300 MW. EMCO coal fired plant will be commissioned in two years from now and will produce 300 MW. The Itezhi Tezhi hydropower station is expected to come online sometime this year, but due to the anticipated water problems it will likely yield 50% of the previously projected output, translating to about 60 MW. Zambia has other large hydropower projects that have been in operation for years, and hopefully we receive enough rain over the next three years to fill those basins. Regardless, the Ministry is in the advanced stage of facilitating investment by private investors in solar powered farms, which should provide an additional 600 MW by the end of October 2016. Some companies are also looking into Zambia’s wind patterns as well to see what kind of power that could yield. Needless to say, we are not leaving any stone unturned.
At present, the mining industry has not been restricted on power usage. The government is in full understanding that the mining plays a large role in our national economy. Each operation has submitted their needs, and whatever power is in excess that the government needs to import will be charged at a premium in order to share the cost burden. Discussions regarding this procedure were all positive, and miners have welcomed the idea.
Along with power stabilization, what developments can we expect from Zambia in the coming years?
CY: We are highly cognizant that investors predict performance based on policies and fiscal frameworks, and we do not intend to destabilize their planning. Thus, a primary goal of our government is to provide steady legislation. Our meetings with mining industry players have fostered an open dialogue environment that will surely aid in avoiding consistency issues. Within the next few years, the mining sector will have performed beyond what anyone could have projected. There has been hardship, but after sorting out our issues Zambia has already seen production increase. The ministry is opening up discussions concerning the budget for next year, which has not been done before, and we are certain this will have a positive impact on output. The foundation for the mining industry is very fertile, and I can guarantee growth more sizeable than anything that has been done over the past three years.
This interview was conducted as part of research by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2016. A pre-release report on the Central African Copperbelt was released in May 2015 and can be accessed here. To participate in this report, please contact Sharon Saylar at firstname.lastname@example.org.