Significant Investment and Takeover Plans for Zambia’s Mopani Copper Mines
The Mopani Copper Mines in Zambia are set for a major shift, with UAE’s International Resources Holding (IRH) scheduled to take over by the end of February. According to Finance Minister Situmbeko Musokotwane, the new investor plans to inject a substantial investment of USD 620 million into the copper mine.
Notably, investments of USD 130 million, including tranches of USD 80 million and USD 50 million, are expected to be made even before the handover, indicating the investor's commitment to revitalizing the mine. The first tranche could be released as early as this week or the next.
The minister expressed optimism about the recovery of the mining industry this year, anticipating increased production and investment. This boost in copper production is crucial for Zambia, as the metal accounts for over 90% of the country's foreign exchange earnings. The increased production is expected to support the local currency, the kwacha, which has been impacted by the recent decline in copper output.
Challenges and Government Strategies
Copper production in Zambia fell by 7.9% in Jan-Oct 2023, following a 4.7% decrease in 2022. This decline is attributed to various challenges, including under-investment and operational issues at state-controlled mines, low grades, and flooding. The government aims to increase copper production to 3.0 million tonnes in the next decade through reforms, including tax changes, mining license audits, and improving the investment climate.
The commitment of over USD 5 billion in investments by major copper mine owners, coupled with the resolutions regarding KCM and Mopani mines, are expected to bolster copper production in Zambia. This revitalization of the mining sector is a pivotal step towards economic stability and growth in the country.
