Keypoints:
- Presidency rejects free-carry stake proposal
- Investors reassured draft rules will not proceed
- Consultations continue on new mineral regulations
ZAMBIA’S presidency has dismissed a controversial proposal that would award the state a minimum 15 percent stake in critical mineral mines without paying for the shares, moving swiftly to calm investor concerns. The proposal surfaced in a draft ‘statutory instrument’ prepared by the mines ministry and swiftly drew scrutiny from operators, Bloomberg News reported.
According to Bloomberg, the draft regulations would give the state a ‘non-dilutable free-carried interest’ in copper and other critical mineral projects. The document also contained provisions enabling the government to raise its stake to as much as 40 percent, financed through dividend forfeitures and tax concessions rather than direct payments.
Hichilema’s team says plan will not advance
Speaking in Johannesburg, Jito Kayumba, President Hakainde Hichilema’s special assistant for finance and investment, said the presidency does not support the proposal and does not intend for it to be enacted.
‘From the view of the presidency, it’s not something that will be brought to fruition, because we do not support it,’ he said. ‘Government has no desire to take a free carry or any consideration, without there being any financial consideration.’
Kayumba emphasised that Zambia remains committed to investor confidence as it seeks to revive copper production, attract new capital and provide stability after years of unpredictable policy shifts.
Sector warns of investment implications
Analysts and industry executives have warned that the proposal, if implemented, could undermine roughly $10bn in planned mining investments earmarked to boost output in Africa’s second-largest copper producer. The sector is central to Hichilema’s target of more than tripling national production to meet surging global demand for energy-transition minerals.
A free-carry requirement would risk signalling a turn toward resource nationalism, analysts say, undermining the administration’s efforts to reassure investors of regulatory certainty.
Ministry downplays concerns amid consultations
Hapenga Kabeta, permanent secretary at the mines ministry, said the free-carry concept reflected ‘merely ideas’ under discussion. He noted that engagement with government agencies and private sector stakeholders is ongoing, with the ministry aiming to finalise a new regulatory framework before the end of the year.
The draft instrument also seeks to formally classify cobalt, nickel and manganese as critical minerals and proposes giving the state pre-emptive rights to buy all domestically sold production—measures officials consider part of Zambia’s long-term strategy to position itself in battery minerals value chains.
Political context heightens sensitivity
Hichilema, elected in 2021, has prioritised restoring confidence in Zambia’s mining sector after years of strained relations between operators and the previous government, including frequent tax changes. With general elections due next August, the administration is keen to avoid regulatory shocks that could rattle markets or slow capital inflows.
For now, the presidency’s intervention has reassured operators that the more contentious elements of the draft rules will not be pursued, though the sector continues to watch the regulatory process closely.
