ZIMEC 2017 is the perfect opportunity for operators in the mining and energy sectors in Zambia, both established and new to understand the political environment, challenges and successes and investment opportunities by attending the conference sessions, as well as meeting the Zambia’s main political, economic and institutional decision makers. Leading mining and energy houses, government representatives, investors and other complementary businesses will be participating to discuss current and upcoming projects and gain useful insights into current trends of the mining and energy sectors.
“The exposure to the Mining environment has been extremely opportunistic since we were exposed to the ZIMEC platform. We identified our challenges and possibilities to improve our goals and objectives and met with most of the big mining operational companies to discuss our strategic planning for 2018. The stage has been set and now we have to play our role.”- Naeem Fortune | CEO, Africa Union Cargo (Silver Sponsor, ZIMEC 2017)
For the past 7 years, ZIMEC has been instrumental in attracting foreign direct investment into Zambia’s mining and energy industries. The growing Zambian mining sector has witnessed an influx in investment and forecasts are exceedingly positive due to the rising copper prices and increase in demand for Cobalt. This will further incentivise more foreign miners leading to increasing mining projects. Favourable mining legislations and taxation policies have also boosted the growth in the mining sector. Diversification from copper have also been consolidated due to the emphasis on gemstones.
Zambia is also at the forefront in attracting investment for a sustainable energy sector fostering economic development and mitigating the country’s power deficit. Mining accounts for the greatest electricity consumption in Zambia and significant steps are being taken towards renewable power. The country expects to triple its power output to 6,000 megawatts (MW) in 2 years through expansion of solar energy. This has led to FDI coming into the country.
Zambia is at a crossroads, in order to meet the ambitions of Vision 2030, the government is diversifying both the mining and energy industries in achieve sustainable development. Building on the theme for 2018: ‘Invest in Zambia- Generating Value, Diversity and growth through Collaboration’, the conference aims to turn these plans to actions.
The conference will have two focal points: Mining in Zambia and Power in Zambia. Both streams will consist of two days of dedicated conference sessions, exhibition, industry related workshops and robust panel discussions delving into the critical factors prevalent in the industries. ZIMEC will focus on a range of essential topics addressing the future of the mining and energy sectors and prespoctive investing opportunities.
Key Topics include:
They do not stand up to scrutiny, and are not supported by the facts
Allegations by UPND mining spokesman Percy Chanda that the mining industry operates in secrecy through private Development Agreements with the government are a whole decade out of date, Chamber of Mines President Nathan Chishimba said today.
He was responding to an article in the Daily Nation [11 December 2017] in which UPND Chairperson for Mines, Percy Chanda, accused the mining industry of having “secret” agreements with the government.
“Statements about the mining industry should be rooted in fact, and not populist emotion,” said Chishimba. “This is critical given the industry’s pivotal role in generating foreign earnings, employment and economic growth.” Chishimba proceeded to refute each of Chanda’s allegations point by point:
Chishimba said the mining industry and government departments had made significant and important improvements over the past decade in information sharing and transparency, and it is important that this be acknowledged.
“We look forward to the day when politicians find it useful to praise and support the industry, instead of ritually condemning it for short-term political gain.” END
Zambia’s major mines are not exporting copper concentrate, Chamber of Mines Chief Nathan Chishimba said today, reacting to a call by the Mineworkers Union of Zambia that such exports should be banned.
MUZ General Secretary Joseph Chewe was quoted in a news report last week saying that government should ban the export of copper concentrate by mining companies, because refining it into finished cathode copper is “giving jobs to other countries”.
Chishimba said: “This call for a ban suggests there are massive exports of copper concentrate that need to be stopped. We don’t quite know where this is coming from, as the facts paint a very different picture.”
None of the large mines are exporting copper concentrate, he said. It makes no economic sense anyway, because Zambia’s smelters are currently not running at full capacity, and are struggling to find enough concentrate to process. Concentrate is even being imported from the Democratic Republic of Congo to keep certain smelters operating efficiently.
If there is any exporting of copper concentrate by Zambian mines, it is probably being done “at the margins” by very small-scale producers who are unable to have their copper concentrate processed locally for reasons related to their quality.
“Smelters are complex pieces of infrastructure designed to handle copper concentrate only of a certain kind and quality,” said Chishimba. “If anyone is exporting concentrate, incurring all the additional taxes and expense of doing so, one can only assume the concentrate cannot be processed locally.”
In any event, Chishimba said, the answer to job creation in Zambia is not to ban legitimate business activity, but to grow the economy and make it more competitive. “We cannot ban our way to prosperity and employment,” he said.
As for the MUZ leader’s statement that all copper concentrate produced in Zambia should be refined into finished copper cathode locally, Chishimba said Zambia does not have the refining capacity to do this.
Converting anode copper (95% pure) into cathode copper (99.95% pure) is done in a refinery through a process known as electrorefining. Zambia only has two refineries, and their capacity is not sufficient to handle all the copper anode produced by the Zambian mining industry.
“In any event, it is a relatively low value-add process, and it is also extremely power-intensive – an important consideration given Zambia’s current power deficit.”
Chishimba said it would be more helpful if stakeholders addressed their concerns directly with the industry in a spirit of dialogue and engagement, rather than making statements to the media without full knowledge of the facts.
Acting Chief Executive Officer
Zambia Chamber of Mines
The global mining industry is experiencing its most serious skills shortage in decades, and this is having major ramifications on mining countries around the world – including Zambia.
That’s according to a report released today by the Chamber of Mines, entitled Searching for Talent – Skills and Employment in the Global Mining Industry. It is based on interviews conducted with a cross-section of management and employees at mines in Zambia, South Africa and Mauritania.
The immediate effect is that mines in Zambia and other countries are finding it increasingly difficult not just to attract skilled, experienced people, but also to retain them.
“There was a time when you could easily find four or five people to fill a high-level position,” says Johan Jansen, CEO of Mopani Copper Mines, quoted in the report. “Now you battle to find just one.”
Human Resources managers from Mopani, Barrick Lumwana Mine and First Quantum Minerals’ Kansanshi Mine all have stories to tell of the “untimely departure” of promising Zambian mining graduates with several years of experience, often under the mentorship of a seasoned expatriate.
“Just as they are ripe and ready to assume a senior position with more responsibility, they are lured away with a more interesting or lucrative offer,” the report says.
The skills most in demand across the global mining industry as a result of the talent shortage are those that are critical to the daily operation of the mines. They are largely technical, and are the domain of people like engineers, geologists, metallurgists, technicians, mechanics and artisans.
The report cites three major reasons for the global shortage of high-level mining skills. One: the massive rise in global mineral production over the past 20 years – mainly to meet rising demand in China – has drained much of the world’s mining talent pool.
Two: the global mining industry is experiencing its biggest retirement wave in many decades, with up to half of the people in key skill categories nearing retirement. In Canada, one of the world’s largest mining countries, some 49 000 people will be needed in the next decade to replace retiring workers, according to the country’s Mining Industry Human Resources Council.
Three: harsh working conditions, remote locations and long working hours mean mining is no longer as attractive a career option as it once was. “The truth is there are more attractive industries out there for mining graduates, with better work-life balance,” says Sam Ash, General Manager at Barrick Lumwana mine, quoted in the report.
The shortage has made skilled, experienced people particularly valuable and mobile. The report shows how these people – or expats, as they are often referred to – can be found working in mines all over the world. They also include many Zambians: the report profiles Zambian expats who have worked in mining companies in Australia, South Africa, Finland, Mali, Sudan and Mauritania.
The urgency of the skills shortage has seen a renewed emphasis on training in the world’s mining companies, the report says. It takes the form of scholarships, coaching, mentoring, exposure to international mines and formal skills-transfer programmes with expatriates.
The skills shortage has also highlighted the importance for countries to facilitate and simplify the entry of skilled international experts.
“The ease of hiring skilled expatriates is one of the factors which are taken into consideration in the location decision of multinationals,” says a 2013 World Bank study, quoted in the report. It cites research showing that a less restrictive skilled immigration regime helps to attract foreign investment.
Chamber of Mines president, Nathan Chishimba, says in the report that the skills crisis is both a risk and an opportunity – and the opportunity is that it provides a strong impetus for countries to boost their output of mining graduates.
“There is no reason why, with the correct policies and incentives in place, Zambia cannot become a centre of excellence in mining skills and an exporter of talent to the rest of the world,” he says.
The Government of the Republic of Zambia has received financing from the World Bank toward the cost of the Zambia Extractive Industries Transparency Initiative (ZEITI) Project, and intends to apply part of the grant towards payments for the contract for Consultancy Services for ZEITI Independent Administrator to produce the ninth (2016) ZEITI Report covering the period January 2016 to December 2016.
The consulting services (“the Services”) include but not limited to the following;
The Zambia Extractive Industries Transparency Initiative (ZEITI) Secretariat now invites eligible consulting firms to indicate their interest in providing the services indicated above. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services. The following information and documentation will be required to be provided for a firm to be shortlisted:
The attention of interested Consultants is drawn to paragraph 1.9 of the World Bank’s Guidelines: Selection and Employment of Consultants [under IBRD Loans and IDA Credits & Grants] by World Bank Borrowers January 2011, revised July 2014 (“Consultant Guidelines”), setting forth the World Bank’s policy on conflict of interest.
International firms should demonstrate willingness to have local representation by partnering with local firms or individual consultants to encourage transfer of knowledge.
Further information can be obtained at the address below during office hours 08:30hrs to 16:00hrs.
Expressions of interest must be clearly marked on the outer envelope and deposited in the Tender Box at the physical address provided below by 5th May, 2017 at 14:30 hours ”Consultancy Services for ZEITI Independent Administrator” MMMD/ZEITI/C/001/17”.
The Permanent Secretary
Attention: HEAD – PROCUREMENT UNIT,
Ministry of Mines and Minerals Development
New Government Complex, 14th floor,
Independence Avenue, Kamwala
P.O Box 31969, Lusaka,
Phone: +260 211 250120/3
Email: firstname.lastname@example.org or visit www.zambiaeiti.org
Efficient electricity costs must be the basis for tariffs, says Chamber chief.
Knowing the true cost of producing electricity efficiently in Zambia is the first step on the road to cost-reflective tariffs, Chamber of Mines president, Nathan Chishimba, said today.
It is also the first step on the road to eventual reform of the Zambia power sector, which is currently under consideration by the government.
Chishimba’s remarks were contained in a statement released at a media conference held in Lusaka today (Wednesday 9 March 2017) on the challenges and opportunities facing the power sector, and how these are likely to affect the economy.
“At present, the cost of producing electricity in Zambia is not known, as the last study done for ZESCO was ten years ago, in 2007. However, a new study, funded by the African Development Bank, is expected to commence in the course of 2017.”
Chishimba said it was “absolutely crucial” that the findings of this study be the basis for both tariff reform and sector reform.
“Zambia needs a revitalised, reformed power sector able to deliver cost-efficient, competitively priced electricity to grow the economy, employment and disposable incomes,” said Chishimba. “Bringing this about is a mammoth strategic task whose effects with be felt decades from now. It must be done properly.”
Chishimba said the idea that tariffs should be based on the known cost of producing electricity efficiently was one shared by Finance Minister Felix Mutati. “It’s worth recalling that the Honourable minister said in his 2017 national budget speech that cost-reflective tariffs do not mean ‘consumers should end up paying for inefficiency’.”
Chishimba said the idea of reforming the power sector was also increasingly accepted, not just by government but by the Energy Regulation Board itself.
“Minister Mutati said in his 2017 national budget speech that government would conduct a review of the overall structure, governance and operations of the electricity sector, including generation, transmission and distribution. And the Energy Regulation Board issued a paper in 2016 discussing the pros and cons of various reform options in developing countries like Zambia.”
Illustrating the concern the mining industry and other stakeholders have about electricity costs, Chishimba revealed that proposed electricity tariffs at Zambia’s newest power projects are more than 20% above global benchmarks established by the US Energy Information Administration.
“What this suggests is that Zambia’s electricity is not being produced efficiently by global standards, or there is a lack of transparency around the way in which tariffs are calculated,” Chishimba said.
“For new sources of electricity to facilitate economic development and power Zambian homes, it has to be competitively priced. Electricity that users cannot afford is little better than having no electricity at all.”
Competitively priced electricity is all the more important in a developing country like Zambia, because industry needs to generate “much-needed employment”, and households need the affordable power that helps to fuel the growth of the middle class, a key barometer of social progress.
Chishimba said that the mining industry has never shied away from the reality of cost-reflective tariffs. “We are business people, after all, and costs are something we deal with every single day at our mines. We are fully committed to tariffs that reflect the cost of providing electricity in an efficient, transparent and internationally competitive manner.”
The Zambia Chamber of Mines, a body representing mining and allied industries in Zambia has welcomed the removal of 7.5 per cent import duty on copper concentrates following a statement by the Minister of Finance, Honourable Felix Mutati.
The Chamber of Mines and its Members are committed to working with the Government to finding solutions that will allow the mining industry in Zambia to sustain operations, protect jobs, support local communities and contribute to Government revenue.
We note from inception that the Ministry of Finance and the Government at large are committed to fostering the sustainable operations of mining companies, as seen through its resolve to guide the line ministries, including the Zambia Revenue Authority on other issues such as Value Added Tax .This will surely help to continue contributing to job creation and poverty alleviation.
The Zambia Chamber of Mines is committed to working with all stakeholders to put in place a tax system that will:
It must be emphasised that the year 2016 has not been a good year for the mining sector and Government must be commended for striving to make the mining sector stay afloat.
The mining sector in 2015 and 2016 faced challenges that were beyond the control of all stakeholders, including the low copper price and nationwide power deficit. It is our sincere hope that the Zambian Government and the mining industry can continue to have open and fruitful discussions going forward.
The removal of import duty on copper concentrates will help in stabilizing independent smelters, and finished copper output, in addition to employment and contributions to government revenue.
The Zambia Chamber of Mines requested for a waiver before the Parliamentary Estimates Committee based on the following reasons:
The introduction of this duty coupled with the imminent increase in the cost of electricity due to the migration to cost reflective tariffs, would have left mines and smelters with tough decisions to make. If there is insufficient supply of concentrates, finished copper output will be affected, in addition to employment and contributions to government revenue.
Acting Chief Executive Officer
Zambia Chamber of Mines
Zambia needs a more competitive mining tax regime to entice both new and existing investors to invest billions of dollars into the mining industry and boost flagging production, says Nathan Chishimba, president of the Zambia Chamber of Mines.
“Last Friday’s budget speech by Finance Minister Felix Mutati aims to restore financial stability to the Zambian economy and lay the foundations for long-term economic growth – and economic growth depends on investment,” Chishimba says.
In a press statement publicising the release of a new report by the Chamber, Taxation and Mining Investment in Zambia, Chishimba says despite recent welcome changes to Mineral Royalty Tax (MRT), Zambia’s overall effective mining tax rate remains among the highest in the world.
“How is it that we have ceded our long-held position as Africa’s leading copper producer to the Democratic Republic of Congo (DRC). A key part of the answer has to be investment incentives and policy stability. The DRC’s tax regime is not only more investor-friendly than Zambia’s, but has also been much more stable. This has encouraged long-term investment, which has boosted production.”
Chishimba says the importance of new investment in Zambia is all the more timely, as the World Bank has projected that growth in copper production will start to slow after 2019. “Along with a decline in production, there will be a decline in government revenue, mining industry jobs and foreign exchange. However, production levels can increase if there is a new wave of investment.”
Taxation and Mining in Zambia quotes research showing that mining investment in Zambia benefits not just the mining industry but the wider economy too, through what is known as the ‘multiplier effect’. It means mines procure supplies from local businesses, and employees spend their wages in the economy, stimulating more business creation and more employment. A World Bank study on FQM’s Kansanshi Mine in Solwezi found that for every direct employment opportunity created at the mine, a further five were created in the wider economy.
The report also shows how levels of mining investment and national economic growth are inextricably linked. From 1997, investors in the newly re-privatised mining industry collectively poured more than $12 billion into modernisation, expansion and new greenfield ventures. Both copper production and economic growth recovered in 2000 and accelerated in the years thereafter. Importantly, this growth started before the copper price began to recover in 2004, proving it was the surge in investment which turned around the economic fortunes of the country.
The report goes on to cover the challenges of designing a mining tax regime which encourages continued investment – or at least does not discourage it.
The report considers the various phases that a typical mine goes through, from exploration and development to production and closure, and what incentives are necessary to encourage the development of resources through the various stages.
For example, during the exploration phase, when there is no income, the tax regime should ideally allow mines to defer losses to later years and write them off against future profitability. This incentivises mines to continue beyond exploration to actual mine construction.
“When taking business decisions, mines will respond to the nature of the tax treatment in place,” the report says.
Download Booklet – Taxation and Mining in Zambia
Issued by Zambia Chamber of Mines
Acting Chief Executive officer
We are pleased to inform you that with effect from 1st July 2016, our organisation will be relocating to the following address, the main telephone and facsimile numbers & email addresses remain unchanged.
We are moving to;
Mpile Office Park
Stand No. 4953
74 Independence Avenue (next to Ministry of Finance)
Tel No. +211-258383 (Main Line)
Fax No. +211-258385
During the relocation period, should you encounter any difficulties in contacting us via email and land-lines, please contact the following personnel via their mobile phones:
To quote former South African President Thabo Mbeki, who spent time in exile in Zambia:
“I am an African…I owe my being to the hills and the valleys, the mountains and the glades, the rivers….and the ever-changing seasons that define the face of our native land…”
To paraphrase Mbeki, I am a patriotic Zambian.
I work for a listed global mining company. I am proud to be both a Zambian and a modern miner, and I see no contradiction in that, merely a continuation.
Copper is the foundation of our development. For decades, it has fed Zambians, it has housed Zambians, it has educated, clothed and protected Zambians.
And, at least 600 years before copper was “discovered” in Zambia in 1895 by American scout Frederick Russell Burnham, copper crosses were being used as currency in the great trading civilisations of the 11th and 12th centuries.
Our Zambian Coat of Arms, adopted at independence in 1964, pays a fitting tribute to our industry by prominently featuring a miner’s headgear.
As the world continues to develop and industrialise, it drives demand for copper. So, despite the current downturn, copper has a great future.
Can Zambia be a part of that future? I firmly believe it can.
Last year, we produced 711 000 tonnes of copper – more than three times the level of 15 years ago.
I have a vision that in another 15 years, when my hair is greyer, Zambia’s copper production will have breached 2 million tonnes.
I believe this is achievable.
The copper is there.
Zambia’s mines have enough reserves to last another 50 years. More recent discoveries could take us well into the next century.
The long-term demand is there.
As countries in Asia, Africa and South America develop and industrialise, they will need copper.
But the story of Zambian mining should not only be about copper. We have undeniable evidence that Zambia is capable of producing a wider range of mineral materials if concerted effort is made to address the long term sustainability of the mining sector in Zambia.
And in mining, the long term is everything.
It takes at least a billion dollars to start a new mine, and several years before a return on investment is possible. But when good mining meets a good, stable policy framework, investors will commit their capital. This will result in a reinvigoration of exploration projects, which will then drive discoveries that will promote new and more exciting mining projects.
It is this fusion that we must strive for, if Zambia is to maintain its position as a favoured mining destination.
Yes, last year’s 711 000 tonnes is a record. But if you go back to forecasts made a few years ago, we should by now be closer to 900 000 tonnes.
Yes, our existing reserves are extensive.
But after a century of mining, the ore grades are lower, and the copper is more technically challengeing – and expensive – to access.
Since privatisation, approximately $12 billion has been invested in Zambia’s mines. Kalumbila and the recent modernisation of Mopani are just the latest shining examples.
But more is needed.
The World Bank is forecasting a decline in Zambia’s copper production after 2019, unless there is, quote-unquote, a “new wave of investment”. Given the timescales in mining, we have no time to lose.
All of us here today know that policy instability and friction between Zambia’s Government and mining industry have benefitted no-one in recent years. But, I truly believe those days are past us. Since early last year this Government has shown that it is willing to listen. To those investors here today, I point to the recent decision to lower MRT, in the face of budgetary pressures, as evidence of long-term policy making to safeguard the future health of the country’s pre-eminent industry.
The industry, too, has learnt from recent times. We acknowledge our wider role as a developmental driver for Zambia, and we recognise that we must ‘make our case’ to the people of Zambia.
This week, the Chamber has launched a new website, appropriately titled MiningforZambia.com, to help ordinary people learn all about our industry, its challenges, and its contribution. As a purely educational resource, I believe this is the first industry website of its kind.
So, good progress has undoubtedly been made by all parties in the last 18 months.
However, we all need to acknowledge the further challenges that lie ahead.
We must find the collective means to overcome them, through the symmetry of industry excellence and responsive regulation, if my vision is to come to pass.
Many of those challenges – power, regulation, investment, and so on – will be aired over the next two days, and I thoroughly look forward to being part of this vigourous debate.
For, let us be clear, tomorrow’s mining industry depends on decisions taken today.
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