ZAMBIA Trends and Developments Contributed by: Emmanuel Manda and Innocent Mung’omba, Musa Dudhia & Co.
some instances, parties may also explore the use of price adjustment clauses, indexation mechanisms or shorter payment cycles as risk mitigation tools. The Local Content Regulations The Local Content Regulations were issued on 14 October 2025 and apply to the procurement of core mining goods and services by mining/mining-related companies. Principally, the Local Content Regulations require mining/mining-related companies to reserve a minimum of 20% of their annual procurement budget for a “local company” involved in the supply or provi - sion of a core mining good or core mining service. The list of core mining goods and services is set out in the First Schedule to the Local Content Regulations. Mining/mining-related companies are further required to give preference to a core mining good or core min - ing service that is produced or sourced locally in Zam - bia and progressively increase the reserved minimum procurement threshold as follows: • from 20% to 25% by 31 December 2026; • from 25% to 35% by 31 December 2027; and • from 35% to not less than 40% by 31 December 2030. The Local Content Regulations also require the pro - curement of a non-core mining good or non-core min - ing service which is critical to the operation of the min - ing industry by a mining/mining-related company to be exclusively reserved for a local company. The list of non-core mining goods and services is set out in the Second Schedule to the Local Content Regulations. The Local Content Regulations define a “local com - pany” to mean “a citizen-empowered company or a citizen-owned company”. In turn, the Local Content Regulations adopt the following definitions of “citizen- empowered company” and “citizen-owned company” contained in the Citizens Economic Empowerment Act No 9 of 2006: • “citizen-empowered company” – a company where 25% to 50% of its equity is owned by Zambian citizens; and • “citizen-owned company” – a company where at least 50.1% of its equity is owned by Zambian
citizens and in which Zambian citizens have signifi - cant control of the management of the company. Accordingly, for an entity to attain the status of “local company”, at least 25% of its issued share capital should be held by Zambian citizens or a Zambian entity owned by Zambian citizens. Following the issuance of the Local Content Regu - lations, most of the large suppliers of mining goods and services with foreign shareholding are considering various options for attaining “local company” status to enable them qualify to supply up to 100% of a min - ing/mining-related company’s core mining goods and services. The options being considered include the following: • the transfer of shares equivalent to at least 25% of the issued share capital from existing foreign shareholders to Zambian citizens or entities owned by Zambian citizens; • share subscriptions where Zambian citizens or entities owned by Zambian citizens are allotted shares equivalent to at least 25% of the issued shares in the supplier company; and • listing on the Lusaka Securities Exchange. Accordingly, the implementation of the Local Content Regulations is expected to increase local participation in Zambia’s mining industry, which has continued to be the backbone of Zambia’s economy. For mining and mining-related companies, the imple - mentation of the Local Content Regulations marks a significant shift from merely a cost- and quality-driven procurement process to a compliance-driven procure - ment process. In this regard, mining and mining-relat - ed companies are expected to: • reconstruct their supply chains to prioritise local suppliers with a Zambian shareholding; • develop partnerships with local suppliers with a Zambian shareholding; and • reduce reliance on foreign vendors. Conclusion The Currency Directives and the Local Content Regu - lations collectively signal a decisive shift in Zambia’s
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