Govt must negotiate higher stakes in upcoming mines – Expert

The prices of critical minerals on the […]

The prices of critical minerals on the London Metal Exchange are clearly showing positivity and present Zambia with the potential to earn more from mineral exports, considering that the country’s economy is dominated by the mining sector, which accounts for about 70% of the country’s total exports.

 However, the question of whether Zambia stands a better chance is considered to be questionable by many experts in the mining sector, considering that the government holds less stake in the mines compared to investors.

 But the bigger question lies in whether the government can increase its stake in foreign-owned mines or not. Mines expert Charles Mulila described the positive fluctuation in terms of mineral prices on the London Metal Exchange as a clear sign of global demand, which the country needs to take advantage of.

 Speaking in an interview with Zambian Business Times-ZBT, Mulila noted that for the country to benefit from minerals, the government should take advantage of the new upcoming mines to ensure that it holds a huge stake in terms of share.

“Government needs to take advantage of new upcoming mining companies to ensure that it holds a huge stake through the contract awarding, which should be done prudently and should be binding agreements and disclosures,” said Mulila.

He added that the situation of letting foreign investors hold a big stake in the mines at the expense of the government needs to be addressed.

 “Government needs to properly negotiate the shareholding portfolios in the mines to avoid foreign investors having a huge stake at the expense of the government so that Zambian citizens get more benefits from the mines.”

 He further mentioned that aside from the government increasing its stake in the mining sector, the aspect of value addition should also be considered to ensure that minerals are value-added and exported for a better value.

 “We need value addition in terms of opening up local selling points from pits to ports, especially with the Lobito corridor, which is upcoming, taking advantage and ensuring value addition for these critical minerals, and that starts by negotiating proper shareholding portfolios,” said Mulila.

Article by Justine Phiri