Mining has remained central to the Zambian economy with the mining of copper dominating the sector. In 2016, Zambia was the second (2nd) largest copper producer in Africa and ninth (9th) in the world. In the year 2013, copper production in Zambia reached its peak, at over 800,000 tonnes. It is projected that copper production will reach 1,500,000 tonnes by the year 2018 and investment in the mining sector will reach approximately USD 15 billion, since 2000, by the year 2020, on account of new projects under implementation and/or exploration, if the international average metal prices hold above those recorded in the year 2014. Other than copper, Zambia’s endowment of mineral resources is substantial and the mineral wealth includes metals, gemstones, industrial minerals, building and energy minerals.
ii. Investment opportunities in the Mining Sector
Zambia has a broad spectrum of mineral resources including Gold, Copper and Cobalt, Zink and Lead, Iron Ore, Manganese, Nickel and Platinum Group Elements, Gemstones, Industrial Minerals and Energy minerals (Uranium, coal and Hydrocarbons), which presents excellent investment opportunities in the extraction and processing of these minerals in the country.
iii. Incentives in the mining sector
a. Guaranteed input tax claim for seven years on pre – production expenditure for exploration companies in the mining sector;
b. Any mining company holding a mining license carrying on the mining of base metals is taxed at 30%;
c. Dividends paid by a mining company holding a mining license and carrying on the mining operations is taxed at 0%;
d. 25% mining deduction on capital expenditure on buildings rail lines, equipment, shaft sinking or any similar works; and
e. The debt equity ratio has been reduced from 2.1 to 3.1, to encourage further investment in the Mining Sector.