November 19, 2017

Zambia’s royalty regime gives miners a new lease of life

The government of Zambia has made a decision which should give miners confidence that their operations will be sustainable at least for now.

As approved by Zambia’s parliament, a new royalty regime for copper will see royalties levied at 4% for prices below $4 500 per tonne and at 6% for prices above $6 000/t in a bid to cushion miners against softer metal prices.

President Edgar Lungu’s cabinet approved the new royalty fee structure in February. Lungu is now expected to sign the regime, which will be effective from April 1 2016.

Zambia is Africa’s second-largest producer of copper, which accounts for the greatest share of its income from exports. Royalties for copper prices between $4 500 and $6000/t will be charged at 5%.

Mining companies in Zambia are scaling down operations to cope with low revenue.

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