The government intends to maximise the benefits from the metals, which are crucial for the energy transition. Credit: BETO SANTILLAN/Shutterstock.

Zambia is planning to establish a state-owned investment firm that will hold at least a 30% share in the production of critical minerals from future mining projects, reported Bloomberg News.

Zambia Mines Minister Paul Kabuswe was cited by the news agency as saying that the government intends to maximise the benefits from the nation’s wealth of metals, which are crucial for the energy transition.

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The proposed SPV will be instrumental in Zambia’s investment in critical minerals, incorporating a “production sharing mechanism” to secure a minimum 30% of output from new mines.

This initiative aligns with Zambia’s ambition to significantly increase its copper production and tap into its reserves of cobalt, graphite and lithium.

Major mining companies including First Quantum Minerals, Barrick Gold and China Nonferrous Mining are already expanding their copper operations in Zambia.

The country is also relying on increased production from the Vedanta Resources-controlled Konkola and Mopani copper mines to achieve its target of three million tonnes of copper annually by 2031.

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According to a document from the ministry, to reach this goal, existing mines need to double their output, while new projects such as KoBold Metals’ Mingomba are expected to contribute significantly.

Furthermore, the government plans to mandate that investors in the critical minerals sector spend at least 35% of their procurement budgets on local suppliers. It is also considering policy revisions to limit the export of raw materials.

In a separate announcement, Midnight Sun Mining has stated its intention to challenge the Zambian Ministry of Mines and Minerals Development’s decision to reject the renewal of its large-scale exploration licence 21509-HQ-LEL.

The license encompasses the Kazhiba Dome target and is said to be crucial to the company’s Solwezi Project.

The Kazhiba Licence, originally issued on 1 March 2017 and renewed on 28 February 2021, was up for its second renewal when the Ministry’s website indicated a rejection.

Midnight Sun filed the renewal application on 1 December 2023, but the Mining Licensing Committee rejected it in June 2024 without providing formal notice or explanation as required by law.

The company has since sought clarification from the Ministry and retained Zambian legal counsel to defend its rights.