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Players in the mining industry have warned that the sector risks reverting to its status as one of the world’s least stable copper mining jurisdictions if the Minerals Regulation Commission Bill is not amended.
They also cautioned that Zambia would face long-term policy instability and mining investment stagnation if the Bill is passed in its current form.
This would reverse the fragile gains of the past three years and signal to the mining investment community, both local and global, that Zambia lacks policy stability.
This warning comes from a statement issued by the Association of Zambian Mineral Exploration Companies (AZMEC) and the Zambia Chamber of Mines (ZCM) on Tuesday.
“This will drive up the perception of investment risk in Zambia, increase the cost of capital for every business in the country, and deliver a fatal blow to the Government’s ambitious strategy of increasing copper production to 3 million tonnes.
Our members believe that with a handful of key changes to specific sections, the impact of this Bill could be dramatically different. A law that would deter mining investment as it was currently drafted could spur investment, aligning with government strategy,” the stakeholders said collectively.
Read more: Small scale miners urge lawmakers to be future-oriented in perfecting minerals bill
They noted that industry calculations showed that more than half of the targeted increase in annual copper production would have to come from ‘greenfield’ sites—those mineral deposits that have not yet been discovered.
To achieve this, Zambia would need to significantly increase mining exploration and the investment required to fund this high-risk activity.
“If we are truly interested in driving investment into our economy, we must signal clearly that investors’ property rights will be respected at all costs.
Unfortunately, due to the omission of detail on the management of the mining cadastre, the prospect of forced ‘free carry’ acquisitions by the State of stakes in new ventures, and the introduction of sweeping procedural discretions including the power to usurp the universal ‘first come, first serve’ license application standard, this Bill will seriously undermine property rights,” they stated.
The mining industry emphasized that while the regulatory framework for mining needs reform, all reforms should aim to significantly increase production capacity.
Furthermore, reforms must be transparent about desired outcomes so that investors can plan accordingly, and laws must be drafted precisely and clearly to achieve bureaucratic and regulatory efficiency.
“It is not too late to reconsider. The Bill could be resuscitated and made fit for purpose with only a handful of key amendments.
“These we have set out in writing in our various submissions to Parliament. Otherwise, fixing these provisions once enacted—and once the harmful impact has been felt—will require numerous amendments to the law,” they said.
They contended that the Bill grants unaccountable and arbitrary discretionary decision-making powers to individual regulators, which presents obvious future corruption risks, especially at a time when there are already alarming and inexplicable actions by the Mining Cadastre to reallocate or carve up licenses.
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