The Zambia Chamber of Mines has welcomed the suggestion of Dr. Alfreda Kansembe-Mwamba, Zambia’s Ambassador to Argentina, that it should consider a Memorandum of Understanding with its Argentine counterpart, the Camara Argentina de Empresarios Mineros (CAEM).
Opportunities abound for the two Chambers to learn from each other, and other jurisdictions, to formulate best operating practices in all areas, and the best policy options to encourage a sustainable and socially and environmentally responsible mining industry.
According to Sokwani Chilembo, CEO of the Zambia Chamber of Mines, a major area of potential co-operation would be on mining policy and regulation, and the effects the policy environment has on mining investment and economic growth.
“At this time, with Zambia a complete outlier in the burden it places on mining investment, we need to look at some of the things Argentina has got right in recent years. The Argentinian Mining Code is something we in Zambia should study. Its emphasis on long-term stability – there is a 30-year stability clause for mining investments – and a reasonable 3% royalty rate, has done a great deal to open up Argentina as a mining destination.”
Mr Chilembo said that the numbers plainly showed that policy which encouraged investment had worked well for Argentina, which was now positioned as a genuine mining destination for the future. This was in stark contrast to the position in Zambia, where an emphasis on short-term government revenue generation has eroded the country’s standing.
“Since the removal of the former Argentine government’s investment disincentives in 2015, such as foreign exchange controls, investment in mining exploration – to develop the mines of tomorrow – has swollen to $ 200 million a year. In Zambia, our exploration expenditure has slumped to $ 10-20 million from a high point 10 years ago of around $ 100 million a year. In short, Argentina is now well placed to service the coming 4th Industrial Revolution, whereas Zambia, despite our mineral endowment, is not.”
There is much to be learnt from Argentina’s recent progress and Zambia’s more cyclical policy path over the last decade. The two Chambers’ shared learning will greatly assist both countries’ policy makers, thought leaders and professionals to understand what policies best encourage mining investment, and how that investment can be translated into broader economic growth.
ISSUED BY SOKWANI CHILEMBO -CEO ZCM
31ST AUGUST 2019
