1

PRESENTATION BY

HON. RICHARD MUSUKWA, MP, DEPUTY MINISTER OF MINES, ENERGY AND WATER DEVELOPMENT

DELIVERED DURING THE ZAMBIA ROUNDTABLE ON MINING HELD AT THE MINING ON TOP AFRICA – LONDON SUMMIT

(25TH JUNE, 2014)

INVEST IN ZAMBIA'S MINING INDUSTRY 2

OUTLINEGeneral Information on ZambiaMining Industry OverviewMineral/Petroleum PotentialMineral Development StrategyMining Fiscal RegimeMining LegislationInvestment Opportunities in the Mining

SectorReasons for Investing in ZambiaConclusion

3

WHERE IS ZAMBIA? General Information  

INVEST IN ZAMBI'S MINING INDUSTRY

MOZAMBIQUEZAMBIAANGOLA

DRC

NAMIBIA

SOUTH AFRICA

TANZANIA

• In the Heart of Africa

• Landlinked

• Size: 752,614 sq.km

• Population: 13 million

• Tropical Climate

• Major Economic Drivers:

1. Mining2. Agriculture3. Tourism

Madagascar

INVEST IN ZAMBIA'S MINING INDUSTRY 4

MINING INDUSTRY IN ZAMBIA - BRIEF OVERVIEW Mining in Zambia has been predominantly for copper and

cobalt.

Since the first major phase of mining of the Cu-Co mineralization of the Copperbelt in the 1930’s, the mining industry has been an essential and integral component of Zambia’s economic development

Mining contributes up to 80% of foreign exchange earnings.

Zambia ranks as the second largest producer of copper in Africa and one of the world’s largest producers

It is estimated that Zambia has sufficient resources for production to continue for at least 50 years but new discoveries are being made all the time.

Zambia possesses one of the world’s most vital and complex metallotects.

It has a wide variety of other minerals, such as precious metals, gemstones, industrial and energy minerals, and ferrous metals2

INVEST IN ZAMBIA'S MINING INDUSTRY 5

MINERAL POTENTIAL IN ZAMBIA

D

INVEST IN ZAMBIA'S MINING INDUSTRY 6

MINERAL POTENTIAL IN ZAMBIA con’d

BASE METALS COPPER COBALTTo a lesser degree (largely mined out) LEAD ZINC MINOR METALS TIN & TANTALUM RARE EARTH ELEMENTSPRECIOUS METALS GOLD SILVER PLATINUM GROUP ELEMENTSINDUSTRIAL MINERALS LIMESTONE & DOLOMITE CLAYS/ALUMINOSILICATES TALC/BARYTE/FLOURITES ZEOLITES SILICA SANDS/FELDSPAR

 

 

GEMSTONES EMERALD AQUAMARINE TOURMALINE GARNETS AMETHYST

DIAMONDS

FERROUS METALS IRON ORE MANGANESE NICKEL

ENERGY MINERALS URANIUM COAL COAL BED METHANE OIL AND GAS

Zambia has the following minerals:

INVEST IN ZAMBIA'S MINING INDUSTRY 7

PETROLEUM POTENTIAL

INVEST IN ZAMBIA'S MINING INDUSTRY 8

INVEST IN ZAMBIA'S MINING INDUSTRY 9

MINERAL DEVELOPMENT STRATEGY

To intensify exploration for the development of new mines in order to increase and diversify mineral and mineral-based exports and maximize long term economic benefits to the investor and Zambia.

To intensify exploration of the energy minerals, in particular oil and gas for the development of the petroleum and energy industry in Zambia.

To add value to Zambia’s amazingly wide spectrum of minerals resources

To create manufacturing industry to produce mining industry consumables.

To attract Direct Foreign Investment to be able to realise above objectives.

INVEST IN ZAMBIA'S MINING INDUSTRY 10

MINING FISCAL REGIME

30% Corporate Tax;

6% Mineral Royalty 

15% withholding tax on interest, dividends, royalties, management fees and payments to affiliates or subcontractors in the mining sector

25% capital allowance deductions for the mining sector 

Capital expenditures on new projects are ring fenced and only become deductible when the projects start production

15% variable profit tax on taxable income which is above 8% of the gross income

10% Property Transfer Tax on Transfer or Sale of Mining Rights

VAT refund period for exploration is 7 years

INVEST IN ZAMBIA'S MINING INDUSTRY 11

MINING LEGISLATION

The principal mining law is the Mines and Minerals Development Act of 2008.

This Act is currently undergoing review to align it to global trends.

Other legislation includes the Mineral Royal Tax Act, Petroleum Act, Explosives Act and the Environmental Protection and Pollution Control Act.

INVESTMENT OPPORTUNITIES IN THE MINING SECTOR

The following are some investment opportunity sectors :

Manufacturing of the following engineering products: copper products; iron and steel; cobalt; and other engineering products

Beneficiation of phosphates and any other related material in fertilizer – the case could include manufacturing of Fertilizers from Natural Gas

Development of Manufacturing facilities based on industrial minerals such as activated clays, bentonitic clays, fluorite, gypsum and baryte for various industrial usage

Down-stream processing of gemstones, industrial minerals and dimension stone: With abundant occurrences of industrial minerals, there is a major gap investment in this sector

INVEST IN ZAMBIA'S MINING INDUSTRY 13

REASONS FOR INVESTING IN ZAMBIA

A rich mineral resource base providing business opportunities in a country which is Investor-friendly

An enabling Investment Policy that provides incentives

Political Stability

Adequate Infrastructure

Favourable Climate

Rich skilled and trainable human resource

INVEST IN ZAMBIA'S MINING INDUSTRY 14

CONCLUSION

The Zambian Government through the Ministry of Mines, Energy and Water Development in particular welcomes investment in the development of its Mineral Resources.

The Zambian Government is particularly focused on diversifying the mining sector to include mining of minerals such as uranium, coal, manganese and industrial minerals, natural gas and petroleum, in addition to the copper and cobalt.

The Zambian Government has created the necessary environment for investment in the mining sector.

I therefore wish to invite both junior and large mining companies to invest in Zambia.

INVEST IN ZAMBIA'S MINING INDUSTRY 15

I THANK YOU FOR YOUR ATTENTION !ZAMBIA…….. AFRICA’S

BEST INVESTMENT DESTINATION