The Zambian Cabinet has approved the establishment of a special purpose vehicle (SPV) aimed at enhancing the country's earnings from its mineral resources, reported Reuters.

Quoting the Cabinet, the news agency said that the new entity will enable the country to "move away from the dividend payment model for mineral resources and adopt a production-based sharing mechanism to ensure benefits accrue to the people of Zambia beyond Statutory obligations”.

The new business model would allow for sharing of minerals produced and enable the government to negotiate prices of the mineral.

The Cabinet underscored the importance of this new entity in ensuring accurate declarations of mineral consignments for both export and domestic use.

Currently, the government holds mining interests through ZCCM Investment.

ZCCM, which has stakes in mines operated by companies such as Vedanta Resources and First Quantum Minerals, has recently executed a significant transaction.

The company divested a 51% stake in Mopani Copper Mines to a subsidiary of the United Arab Emirates-based International Holding Company, while maintaining the balance stake.

Earlier this year, Zambia's Mines Minister, Paul Kabuswe, was cited by Reuters as saying that the government was looking to secure larger stakes in upcoming mining projects. The aim is to increase state revenue and encourage investors to allocate more funds towards social initiatives.

Zambia's copper production in 2023 stood at 698,000t, down from the 763,000t recorded in the previous year.

However, the country has set an ambitious target of reaching an annual copper output of three million tonnes within the next ten years, in anticipation of growing demand from the electricity and construction sectors.