INDUSTRY SPOTLIGHT
SPOTLIGHT ON MINING IN ZAMBIA As Africa’s second largest producer of copper, mining is a staple of the Zambian economy. We examine an industry on the cusp of prosperity in the face of worldwide copper demand Writer: Phoebe Harper | Project Manager: Matt Cole-Wilkin
M
ining has long been the lifeblood of the Zambian economy. The extractive sector contributes approximately 10 percent to the national GDP. And today, the industry is faced with some of the most favourable market conditions in its history, thanks to an exceedingly high demand profile for its primary resource – copper.
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The sector has been carried on a promising trajectory since the privatisation of Zambia’s mines in the late 1990s, despite initially triggering an unprecedented economic crisis throughout the Copperbelt. This has largely been due to the conditions of the global copper market and the transition to electric mobility across the world. This
ZAMBIA CHAMBER OF MINES (ZCM)
ZAMBIA COPPER PRODUCTION IN NUMBERS • 2019 - 776,430 tonnes • 2020 - 882,061 tonnes • 2021 - goal to produce more than 900,000 tonnes • Long-term goal of exceeding one million tonnes in annual production
endeavour to reach the two-million-tonne mediumterm goal. For this to happen, the industry requires more stable mining policy and a tax regime that will make the cost of capital affordable and secure the confidences of global markets, foreign and local investors.
INTRODUCTION
has significantly boosted copper production, since electric vehicles (EVs) require more copper than tradition internal combustion engines. As a result, in 2020, Zambia recorded a historically high level of copper production, with an output of 882,061 tonnes of copper. Whilst seemingly good news for the industry, Zambia’s tax regime means that mining stakeholders today face significantly higher royalty bills as a reflection of the heightened prices for copper. Despite historic fractures between the mining industry and government policy, the sector is being paid due diligence in terms of its recognition as an economic staple and the country’s most significant productive industry. In recent weeks, an announcement has been made declaring that mineral royalty taxes will become a deductible expense. This significant move will be a boon for the industry and only increase the attraction behind Zambia as an investment destination. Now, players across the copper mining industry
Africa Outlook issue 94 | 3
PEOPLE AND LEADERSHIP DEVELOPMENT AT KANSANSHI MINING PLC
K
ansanshi Mining Plc, a company jointly owned by First Quantum Minerals Ltd (80%) and ZCCM Investment Holdings Ltd, on behalf of the Government of the Republic of Zambia (20%) commenced operations in Zambia in 2004 following the acquisition of its shareholding from Phelps Dodge in 2001. First Quantum Minerals Ltd is the largest copper producer, by output, in Africa. In order to sustain its business and also proactively plan for medium to long
Mr. Mukutuma talking to some of the participants in the General Manager’s Programme
Kansanshi Mining Plc General Manager Anthony Mukutuma
term sustainability of the business, the company not only needs to make the necessary capital investments in plant and machinery, but also needs to develop, grow and nurture its human capital. First Quantum Minerals Limited (FQM) has invested in development of skills and its people from inception in 1996. The company continues to grow and is poised to continue on this trajectory. For the said growth to be sustained, it must be underpinned by people and the right leadership. People that understand the FQM values of ‘Bolder, Smarter, Driven and Together’. FQM runs trades and apprentice training programmes, local
and international graduate programmes, various specialist and professional development programmes for employees and the CEO programme (a programme to develop leaders with the CEO as the principle mentor. A decision was made during 2020 to run a programme to develop ‘ready now’ leaders using the CEO programme concept, with the principle mentor being the General Manager. Using this approach, the expectation was that the successes of the CEO programme could be scaled up. The programme is called ‘General Manager Programme’ – GMP, in short. Kansanshi Mining Plc is running this leadership development program to ensure it has a healthy pipeline of readynow leaders. The 12-month programme has been running since April 2021 with 6 employees on the programme. Given the expected continued growth of FQM, the focus as a company is in ensuring it has leaders developed that understand the culture that has underpinned its success to-date to drive and sustain this growth.
General Manager’s Programme participant Ethel Chasha-Cruz
At Kansanshi Mining Plc, the approach taken was to partner with a renowned leadership training service provider (Franklin Covey) that could take the approach to leadership of the FQM Way of Bolder, Smarter, Driven and Together and use this as a blueprint for developing FQM leaders of tomorrow. Successful leaders are differentiated by the results they achieve, the actions they take, how they think and who they are. The decision to partner with Franklin Covey was, therefore, taken to ensure a structured approach to the programme and guarantee effective leaders emerge post the programme.
The first cohort for the GMP is made of 6 senior specialists (experts in their field of study) selected from across the business. The program has practical value-add projects working with an assigned coach/mentor (a senior manager in FQM) and a formal journey into the fundamentals of effective leadership by Franklin Covey. The Leadership Development programme is, therefore, expected to ensure Kansanshi Mining Plc has a healthy pipeline of ready-now leaders to handle strategic tasks going into the future.
General Manager’s Programme participant Gerald Zambika
Africa Outlook issue 94 | 5
KANSANSHI FOUNDATION
Kansanshi Cycling Team
Movie Night provides popular evening entertainment in our rural villages.
Kansanshi Foundation has 7,000 farmers on its farmer input support programme
A
t Kansanshi Foundation, the corporate social responsibility wing of Kansanshi Mining Plc., we believe that in order to establish a lasting legacy, long after mine closure, we need to “teach a man to fish”. This is the philosophy behind everything we do. Our flagship Conservation Farming farmer support and Conservation Farming for Nutrition program are testimony to our philosophy. Since 2012, we have trained over 40,000 farmers in better farming methods that benefit
the environment. We have 7,000 farmers on our farmer input support program and each one of the 7,000 farmers have converted from subsistence farming to emerging commercial farmers, all farming for profit. Crop yields have improved by an average of 200%, with some farmers receiving an improvement in crop yields by over 700%. In 2020, the farmers harvested 6,000 tons of maize and in 2021, the farmers harvested 9,000 tons of maize. The Conservation Farming for Nutrition provides families with a balanced meal every day. Our
Our education support is run by our Kansanshi Education Quality Improvement Program, or KANEQUIP. This program strives to improve literacy levels at the schools we support, by providing teachers with additional training and resources and by providing school children with additional (74,000) text books. The program also provides 6,900 school children with a vitamin and mineral enriched meal every school day. The ingredients for this meal are grown by our farmers. Our mobile library provides school children with additional reading resources, while our School on Radio program provides adults and children with the opportunity of attending school if they are otherwise unable to attend school. Every month we fabricate new school desks and rehabilitate old school desks. We have built two model early childhood development centers and our early childhood development specialist provides support to other government ECD centers.
Our Kwambula Training Center provides advanced artisan training to our local community, to assist them to obtain employment either on our mine or in other industries. We have a strong gender empowerment drive. Our ‘Jimuka’ Program provides adolescent girls with the equipment and counselling to assist them with dealing with the challenges of going through puberty. We have built a one stop center for gender based violence at our local hospital and have also provided a safe house for victims. Both of these facilities are run by the Young Women’s Christian Association. In order to provide funding for these two facilities long after mine closure, we have set up a women run jewelry factory, called Nsanshi Art Studio. Nsanshi Art generates a sizable profit which goes towards the running costs of the two facilities. Nsanshi Art also provides valuable jewelry trade training to vulnerable women. We have 385
Infrastructure Development
Kansanshi Foundation’s education support is run by its Kansanshi Education Quality Improvement Programme
vulnerable children, mostly girls on our school bursary program. We pride ourselves on our support to various sports teams. Our cycling team participates in races both locally and internationally and achieves podium positions in most races. In football and netball, we support teams in all our supported schools, provide support to our Farmers Football League and provide support to our Super League Team, Kansanshi Dynamos and their two subsidiaries, Kansanshi Dynamos Women and Young Kansanshi Dynamos. We have a community rowing team within our Sports Foundation, a chess team and also an athletics team. Our community banking provides micro finance to micro entrepreneurs. Community banking teaches our community to save and invest. We have over 135 community banks each with 20 – 30 members. Our community banks have created micro economies where previously there were none. Due to Covid-19, our micro entrepreneurship training has also moved from the classroom to FM radio.
The benefit of this is the entrepreneurs can continue trading while they listen to their lesson. Our stakeholder engagement covers some 34 NGO’s, traditional leaders and community members. Every month, focused meetings cover topics such as healthcare, Education and Agriculture. Our Community Healthcare includes two mobile clinics that cover rural areas and provide quality healthcare in areas such as malaria prevention, HIV and STD management, pregnancy, general healthcare and nutrition support. During the Covid Pandemic, we have supported our local hospitals with oxygen and Covid-19 testing facilities. Green Charcoal training, making charcoal from waste maize cobs, provides an alternative livelihood to selling charcoal made from trees. Our Community Safety program provides schools with road safety literature and lectures in order to minimize road accidents. This is our commitment to our lasting legacy. P.O. Box 110385 Old Congo Road Solwezi Zambia www.first-quantum.com www.zccm-ih.com.zm
Africa Outlook issue 94 | 7
INDUSTRY SPOTLIGHT
Interview: Zambia Chamber of Mines (ZCM) INTERVIEW
ZCM is the official association advancing Zambia’s mining industry. Advocating a future for responsible mining, CEO Sokwani Chilembo tells us more about the chamber’s vision. Africa Outlook (AO): Can you talk me through the origins of ZCM, how it came about, and its initial vision?
Sokwani Chilembo CEO, ZCM
P
romoting a sustainable future for mining, ZCM’s membership encompasses mining and allied companies of all sizes across the country. We discuss ongoing challenges and take a look at what’s ahead with CEO at ZCM, Sokwani Chilembo.
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Sokwani Chilembo, CEO (SC): The Chamber was formed in 1942 when the scale of Zambia’s copper endowment first became apparent. The operators that were here at the time decided to form the Chamber so that they had a platform to engage with the government of the day. The Chamber continued to exist all the way until 1973, when the mines were nationalised. It was then reconstituted in 2000, after enough players re-entered the market for it to make sense. It’s made up of the major copper mining players and strategic
g n i k a e Br
! y l e f a S s d n u o Gr
KASCCO LIMITED, is a Large-scale mining contractor registered in Zambia as a limited liability company in the year 2005. specialised in: • Mining contract works, • Bulk Earthworks, • Drill and Blast, • Exploration • Civil Works, • General Construction, • Aggregate Crushing, • Transportation and Hire of Heavy Earth-moving Equipment. Kascco Limited provides services to major mining firms in Zambia • First Quantum Minerals Limited -Kansanshi Mine, Zambia • First Quantum Minerals Limited - Kalumbila Mine, Zambia • Barrick Gold - Lumwana Mining Company -Lumwana Mine, Zambia P.O.BOX 110340,Solwezi Zambia Mob: +260979560530 | Email: kasccozambia@gmail.com www.kasccozambia.com
INTERVIEW
INDUSTRY SPOTLIGHT
suppliers to the industry, such as energy distributors on the Copperbelt and other large suppliers of key input. Our membership makeup also includes OEM representatives and other suppliers to the industry. AO: Since inception, how has ZCM developed and progressed in terms of its key objectives and the messages it tries to get across? SC: Now, in addition to the messages that we put across, we also administer other functions. These include rescue services and emergency and disaster preparedness, which we coordinate across the industry. It’s a voluntary service but the training aspect is managed by a competitive league. The winner of this league process gets to attend the International Mines Rescue Competition which takes place annually in different locations around the world. We also coordinate the first aid training process within the industry, and these are initiatives that have grown in recent years. We also host events and various conferences. Before COVID-19, these had become more regional in character. Although the pandemic did throw us off a bit, this side of the Chamber is now progressing quite well again. For example, eight weeks ago we
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We have never seen this kind of demand profile for copper - it’s a once in a century opportunity” - Sokwani Chilembo, CEO, ZCM
Achieved 1.0 million LTI free hours on construction. Mimbula has started a graduation program for geologists. Moxico Resources has employed 580 employees in Zambia. Moxico Resources with its subsidiary Mimbula Minerals believes in ZERO HARM to our biggest assets, our EMPLOYEES!
Moxico Resources starts construction of its leaching project at the Mimbula Mine in Zambia, Copperbelt, close to the Town Chingola having previously reopened the Mimbula Mine. July 2021 was the date construction started of the exciting first phase of the Mimbula Leaching Project this which entails a 10kt Leach Pad and Solvent Extraction and an Electrowinning plant, first metal is expected early third quarter 2022. This will be the first of several phases at Mimbula.
MOXICO RESOURCES Salisbury House London Wall London EC2M 5QQ www.moxicoresources.com
INTERVIEW
INDUSTRY SPOTLIGHT
held our mine rescue awards in Livingstone, and this was attended by our colleagues in Botswana. Finally, policy advocacy is a big part of the Chamber’s role. We advocate for responsible mining, whereby all stakeholders seek mutual benefits for everybody involved, including the host community and hosting business associations, whilst protecting the immediate vicinity of the mine and restoring it as closely as possible to its pre-mining state. The area where we encounter our main challenges is with enforcing stable policies around responsible mining. The existing policies have made it difficult for the industry to grow, so this is where our focus has been for the past few years. AO: What do you find most exciting about Zambia’s mining industry? SC: The most exciting thing is where we are right now. We have never seen this kind of demand profile for copper - it’s a once in a century opportunity. It is a chance to use these great prices to turnaround the industry, and get it back to where it’s supposed to be. For us, this means producing 1.5 million tonnes per annum in the next five years, two million tonnes by 2030, and three million tonnes by 2035.
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ZAMBIA CHAMBER OF MINES (ZCM)
EXPLORING FOR THE FUTURE
Our customers are predominantly based in geology and mining departments with a focus on:
Exploration | Geotechnical | Hydrogeology | Mining Our team is distinguished by their functional and technical expertise combined with hands-on experience.
Blu Rock Mining Services Ltd P.O.Box 20744, Kitwe, Zambia
+260 212 210 968 +260 966 899 999 admin@blurock.co.zm
www.blurockmining.com
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INTERVIEW
INDUSTRY SPOTLIGHT
AO: On the flip side, what are its biggest challenges? SC: It’s the cost of installation, as the mining industry sits in a very high-cost arena. There are a lot of duplicated initiatives that we find ourselves contributing to, like national health insurance, or national skills development plans, when we have our own initiatives that we are invested in. There are issues around the escalation of municipal rates, and the power outlook is another key concern. We also have the very high cost of capital here, because of the risk premium, which we hope will go down with the way that the government is approaching things.
We will continue to promote safety, health, and environmental practices for all key players in the sector” - Sokwani Chilembo, CEO, ZCM
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AO: Have you got any projects in the pipeline you wish to highlight? SC: As an industry we have projects which have been in limbo and are now being reviewed. This includes the expansion of Kansanshi’s smelting capacity, and the extension of its mines. Within the Chamber itself, it has been a couple of years without having our conferences, but next year
ZAMBIA CHAMBER OF MINES (ZCM)
Nash Explosives Limited
Nash Explosives Limited is the first indigenous Zambian explosives company. The company has over the years acquired expertise in the manufacture, application, use and handling of explosive products. The mission is unlocking customers’ riches through safe rock blasting thereby creating value for our customers through the provision and application of superior products and technical knowledge. Website:
www.nashexplosives.co.zm/nashex Telephone:
we are excited to roll out our CSR conference at the beginning of Q2 and the Zambia Investment Mining and Energy Conference. We’re hoping that with the way COVID-19 is evolving with vaccinations that we will be able to make these things happen. AO: How do you see ZCM developing over the next five years? SC: We definitely want to grow our numbers. There is a lot of activity in minerals and copper, so we hope to grow copper volumes and bring on board major operators in manganese and other minerals. We will continue to promote safety, health and environmental practices for all key players in the sector to use within their own operations and to pass on to their contractors. Health and safety are priority number one in everything that we do so that will definitely remain a key focus. We also want to become a centre of excellence in mine rescue and safety, health and the environment as well. We are heavily involved in the environmental protection fund and want to progress the country into a leader in responsible mining.
AO: Are you optimistic about the future of mining in Zambia? SC: Yes, we are. The new government is beginning to enforce policy that is in alignment with what the industry has been seeking for such a long time. Our geological endowment is looking very promising as well so it’s an exciting time and we cannot help but be upbeat. There is a lot of work that needs to be done to bring us to where we’d like to be but we’re pretty sure that anybody who comes along for the ride will not regret coming to Zambia for the next five to 10 years. There has never been a better time to come here.
INTERVIEW
+260976049810 | +260964028144 | Zimbabwe: +263713589237
Tel: +260 96 5879196 www.mines.org.zm Africa Outlook issue 94 | 15
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