Zambia seeks to expand its equity in domestic mining assets, reflecting a broader pan-African trend toward the localisation of mine ownership.

The Southern African country’s state investment company, ZCCM Investments Holdings, recently relayed its intent to increase its minority stakes in mining assets.

This was made known by the company’s CEO, Kakenenwa Muyangwa, who also noted that any such increase would be on commercial terms and not through forced sales.

As seen on Reuters, the Zambian investment firm currently boasts meagre interests in many of the mining assets in the country, from as low as 10%, including those owned by China Nonferrous Metal Mining Group, Canada’s First Quantum Minerals, and India’s Vedanta Resources.

“There is clear intent for us to have substantial stakes in our existing mining assets,” Muyangwa told the aforementioned publication on Thursday.

Following the 2024 exit of EMR Capital from Lubambe Copper Mines and the subsequent sale of its majority shareholding to China’s JCHX Mining, ZCCM-IH successfully increased its equity in the company from 20% to 30%.

Furthermore, Muyangwa confirmed that ZCCM-IH is in the process of raising its stake from 20% to 25% in Mingomba Mining, a KoBold Metals project supported by American investors.

“There’s a gradual move to higher ownership, where we believe being a significant minority gives you more say and leverage in the activities than if you have a very small minority stake,” Muyangwa stated.

The CEO noted that Zambia is uninterested in securing ownership of operating mines in which it has no stake. Instead, the focus remains on assets under development, with shareholding structures to be determined based on the primary holder of the mining permit.

“Where we already own the licence, we are entitled to ask for an element of a free carry before contributing to the rest of the capital that’s required to develop the mine,” said Muyangwa, adding that a range of 5%-15% would be appropriate, with the exact level negotiable.

Furthermore, the state investment firm is looking to employ its royalty-to-revenue model, first used with First Quantum Minerals at Kansanshi Mining, to other mining assets to facilitate its growth plans.

“What we are trying to do is to switch from dividends to royalties for predictable cash flows that are insulated from operating cost inflation,” Muyangwa disclosed.

At Kansanshi, where it has a 20% share, the company gets 3.1% of revenue in place of dividends.

According to Muyangwa, this has generated $110 million since 2022.