The President of Zambia’s Chamber of Mines, Goodwell Mateyo, tells Mining Global why it’s vital his country’s government deliver concessions on tax increases to boost investment in the sector to diversify and allow the industry to realise the bounty of Central Africa’s Copperbelt.
“Zambia has a breath-taking endowment of minerals, from minor metals, gemstones and uranium to industrial minerals.” That is the glowing assessment of Zambia’s mining panorama from the President of the country’s Chamber of Mines, Goodwell Mateyo. However, he concedes the sector has largely been dominated by copper production with its fortunes tied up in the trends of ownership.
“The sector was in the hands of private capital up until 1969 when a decision was made to nationalise,” recalls Mateyo. “Subsequent to that we saw copper production fall from a high of close to 800,000 tonnes prior to nationalisation to a low of 280,000 tonnes of copper produced per annum before privatisation returned in 2000. Since then mines have come back into private hands and this production has seen an uptick thanks to significant foreign investment – our estimate is for total copper production to have reached 820,000 tonnes at the end of 2018. However, there has been little diversification into other minerals.”
It’s that need to diversify, coupled with what many miners see as crippling tax increases, which Mateyo believes is holding back the sector in Zambia from realising the full potential of Central Africa’s Copperbelt. New to his role as President, what are Mateyo’s hopes for his tenure at the Chamber? “We are keen to engage with government and hopefully negotiate a far more acceptable mining tax regime. Currently Zambia is one of the most expensive mining investment destinations from a fiscal regulatory point of view. Our immediate hope is to resolve this impasse…”
He believes it’s vital to improve the perception of mining in Zambia as he notes the current negative impression has informed some of the more adverse regulatory changes. “I am quite optimistic that once we get more stability people will buy-in to the benefit of mining to our population,” he adds, suggesting this would help create the environment for increased investment, alongside the National Development Fund, not only in copper but gemstones and other minerals such as manganese.
Mateyo hopes that a compromise can be reached that delivers a mining fiscal regime as attractive to investors as other countries. Stability is key, as he notes that even though exploration activities often return promising results, the fact that the tax regime has changed five times in the past decade has contributed towards negativity in the sector. “We are also in the process of trying to come up with cost reflective electricity pricing for the mining industry to further bolster its sustainability,” he adds. Allied to these challenges, Mateyo stresses that Zambia’s mineral endowment comes with a high cost of ore extraction – another reason why investment is vital.
Despite the hurdles to overcome, he is proud of the work of Chamber members discovering high grade deposits across the Copperbelt in sync with the mission of the Chamber: “Advancing the interests of its members, local communities, the country and its stakeholders whilst promoting sustainable and responsible mining.”Mateyo explains: “The Mopani Copper Mines project has achieved distinct multiple deep shafts in Kitwe and Mufulira, some reach levels of 2km. At Mopani, we have also consolidated the former Munali Nickel Project – which will become a poly metallic operation producing palladium, nickel, cobalt and copper concentrates – now known as the Mabiza Nickel Mine. From a technological point of view these three projects have overcome significant obstacles thanks to the extent of the capital transaction that has been made.”
Elsewhere, Mateyo notes the likes of Mopani and Lubambe Copper Mines are catching up with the technological innovations with heavy machinery in mines operated by more established members. “Barrick and First Quantum operated mines have moved into open mining at a previously unprecedented scale using very exact GPS-driven science,” he says. “There have also been significant advances around safety nationwide in nearly all of the operations we see. For instance, the remote use of heavy equipment has benefits previously unthought of.”
Beyond the need for regulatory change, Mateyo says the next challenge from a sustainability standpoint is to increase the industry’s investment in the communities in which it operates. “Not so much from a CSR point of view,” he stresses. “But improving and increasing linkages with local industry to enhance the perception of mining operations within the communities.”
Highlighting the fact that around 57% of the world’s cobalt resource is located between Zambia and the DRC, Mateyo argues the region is well placed to boom from the increasing need for battery metals driven by the EV revolution. However, while the copper industry is strategically poised to benefit, he concedes much more investment is required into existing operations and assets to allow cobalt production to finally tune into global demand.
Mateyo originally trained as a lawyer and finds that his analytical approach to problem solving has helped him in his role as President of Zambia’s Chamber of Mines: “My experience in the British legal system has helped in dealing with regulatory and government agencies, especially when it drives towards the marshalling of resources, as some of those discussions can be difficult and challenging.”
What are his predictions for the next 12 months and beyond? “Once we address the tax impasse with the government, we are going to see an exponential rise in the production of both copper and cobalt,” concludes Mateyo. “I am particularly passionate about the gemstone and manganese industry because of the significantly higher indigenous participation in those industries and therefore in those two sectors we will need to work very closely with government to increase the local levels of inclusion in mining to build the industry this country needs to secure its future.”
The Zambia Chamber of Mines
The Zambia Chamber of Mines (ZCM) is registered as an association for mining and allied companies both large and small. The Chamber is governed by a constitution while the policy making body is the Council drawn from member companies. Membership to the Chamber is voluntary and is classified into four categories – Class A, Class B, Class C and Associate. These are based on the type of mining licence that a particular mine holds: large, small, exploration, service provision etc. Originally formed in September 1942, ZCM was formerly known as the Northern Rhodesia Chamber of Mines of Zambia until it was replaced by the Copper Industry Services Buereau (CISB) in 1965. Following privatisation of the mine assets in 2000, the Zambia Chamber of mines was re-established.
By DANIEL BRIGHTMORE, MINING GLOBAL.