The Minisrty of Mines and Minerals Development […]

The Minisrty of Mines and Minerals Development –MMMD, has confirmed that most of the mining firms operating in Zambia, predominantly foreign-owned, have not performed satisfactorily in adhering to the local content law, which came into effect on 1st January, 2026. The local content law, mandates mining and related companies to allocate a minimum of 20% of their annual procurement expenditure for core mining goods and services to local suppliers.

The requirements increase progressively: to 25% after one year, 35% within two years, and 40% within five years. Additionally, as part of the Local Content Statutory Instrument No. 68 of 2025, mining companies are first required to report on their progress after 3 months of the law coming into effect.

Speaking in an exclusive interview with the Zambian Business Times (ZBT), the Permanent Secretary for Zambia’s Ministry of Mines and Minerals Development, Dr. Hapenga Kabeta, confirmed that compliance levels among the majority of foreign-owned mining companies remain below expectations. Dr. Kabeta noted widespread misinterpretation of the law among mining firms, especially regarding the definition of a “local company”.

 He stated that some long-established but wholly foreign-owned companies mistakenly classified themselves as ‘local’ due to their long-term presence in Zambia, resulting in non-compliance and penalties. “In terms of performance, most mining companies have not achieved satisfactory results.

 This underperformance is largely due to a series of misinterpretations regarding company status and compliance requirements. Many companies operating in Zambia for extended periods are, in fact, 100% foreign-owned.

 However, our clients mistakenly assumed that the long-standing presence of these companies automatically qualified them as local entities. This misconception led to the erroneous classification of foreign-owned companies as local, resulting in penalties for non-compliance with local content regulations.” Dr Hapenga stated.

“Consequently, several companies were penalized, particularly for failing to submit regulatory returns on time. Some have since paid these penalties. It is important to note that any penalty imposed is visible to companies through their platform, allowing them to identify areas of non-compliance and the specific penalties incurred.” “A key consideration is that certain penalties, such as those for late submission of returns, not only incur an initial fine but also attract additional daily charges for ongoing non-compliance, as stipulated by law. Therefore, it is both advisable and desirable for companies to clear such penalties promptly to avoid unnecessary accumulation of additional fees.”

While Dr. Kabeta declined to provide specific compliance statistics, he emphasized that compliance is assessed line by line, covering both the submission of returns and the correct procurement of goods and services from eligible local firms.

He also confirmed to ZBT that monitoring and enforcement are managed through the newly established Department of LargeScale Mining and Mineral Investment Promotion under the Ministry of Mines, as well as the Mineral Regulation Commission, which oversees broader sector reforms. Dr. Kabeta further added that under the local content regulations which were signed into law in October 2025 and became operational at the start of 2026, mining firms are now required to publicly share their annual procurement plans, either on their corporate websites or in widely circulated national newspapers, and submit detailed procurement reports to the Ministry of Mines by law.

 “Firms must disclose whether their suppliers meet the local ownership threshold, defined as at least 25% Zambian citizen shareholding, and whether goods and services procured fall under core or non-core categories, as specified in the law’s two schedules.”

Dr. Kabeta stressed the importance of Zambian participation in the mineral value chain, highlighting that local content regulations are intended to foster economic inclusion and strengthen the social license of mining companies within the communities where they operate. He said governmnet has taken steps to train and onboard mining companies in compliance procedures, emphasizing collaboration over punitive action.

Article by Tyndale Muchiya