Mining Sector

i. Overview
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. Year period carry forward of Tax losses (5 years for Prospecting and exploration companies);

c. Any mining company holding a large – scale mining license carrying on the mining of base metals is taxed at 30%;

d. Other mining companies are taxed at 35%;

e. Dividends paid by a company holding a large – scale mining license and carrying on the mining of base metals is taxed at 0%;

f. 25% Capital allowances on Mining Equipment and related expenditure when assets brought into use. This is with effect from 2012;

g. The debt equity ratio has been reduced from 2.1 to 3.1, to encourage further investment in the Mining Sector; and

h. Remission of duty on special mining vehicles and machinery.