ZAMBIA Law and Practice Contributed by: Harriet Mdala, Natasha Lungu, Samuel Muleya and Chanda Musonda-Chiluba, MAY & Company
of doing business, making the sector more accessible to both local and foreign investors. Rich geological potential Zambia is endowed with extensive mineral resources, with copper as the primary export earner. Other sig - nificant reserves include cobalt, gold, emeralds, and other gemstones, alongside industrial minerals. Com - prehensive geological data and surveys, accessible through government and private institutions, reduce exploration risk and attract investment. Political stability Zambia enjoys a reputation for political stability, peaceful transitions of power, and adherence to the rule of law. Investor protection is further bolstered by robust dispute resolution mechanisms, including arbi - tration. Access to regional and international markets Zambia’s membership in the Southern African Devel - opment Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) provides access to significant regional markets. Furthermore, favourable trade agreements facilitate the export of minerals to international markets, enhancing the prof - No foreign exchange controls and dividends may be repatriated without the need for onerous regulatory consents. 5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors Zambia generally imposes minimal restrictions on for - eign investment in mining. However, specific limita - tions exist under the Minerals Act, particularly regard - itability of mining projects. Foreign exchange controls ing certain mining rights and operations. Size-Based Restrictions on Mining Rights Mining rights over areas between two cadastre units (6.68 hectares) and 120 cadastre units (400.8 hec - tares) are reserved for: • citizen-influenced companies: 5% to 25% equity owned by Zambian citizens;
• citizen-empowered companies: 25% to 50% equity owned by Zambian citizens; and • citizen-owned companies: at least 75.1% equity owned by Zambian citizens. Artisanal Mining Only citizens or co-operatives wholly composed of Zambian citizens are permitted to undertake artisanal Small-scale mining is restricted to citizen-owned, citizen-influenced, or citizen-empowered companies. 5.3 International Treaties Related to Exploration and Mining Zambia is a signatory to various bilateral and multi - lateral treaties that promote and protect investments. Bilateral Investment Treaties (BITs) BITs are regulated by the Trade and Business Devel - opment Act. Zambia has entered into BITs with several countries to protect and encourage foreign investments. These treaties aim to create favourable conditions for investors by providing guarantees and protections against risks such as expropriation, unfair treatment, and restrictions on the transfer of profits. Zambia has signed BITs with the UAE, Türkiye, Moroc - co, Mauritius, the UK, Finland, Italy, the Netherlands, France, Belgium, Ghana, Egypt, Cuba, China, Swit - zerland and Germany. mining operations. Small-Scale Mining Of the 16 BITs, only those with the UAE, Mauritius, France, Germany, Switzerland, China, Türkiye, the Netherlands and Italy are currently in effect. Multilateral Treaties The African Growth and Opportunity Act (AGOA) While the AGOA primarily focuses on enhancing trade between eligible African countries and the USA, it includes provisions that protect and promote foreign investments. These protections indirectly encourage US investments in Zambia’s mining sector. SADC As a member of the SADC, Zambia adheres to pro - tocols on trade and investment, including the SADC
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