Mining 2025

ZAMBIA Trends and Developments Contributed by: Harriet Mdala, Maloba Nalomba, Chilufya Sinkala and Hlezipe Halwiindi, MAY and Company

tions on the draft legal framework are ongoing and once consensus is reached with key stake - holders the Regulations will be promulgated. The government is determined to finalise them before the end of 2025. The Minerals Regulation Commission Act, 2024 was recently passed by the Parliament and will commence upon issuance of a commencement order by the Minister of Mines. Until it is, the current Mines Act remains law. Establishment of New Mining Cadastre The government of Zambia is in the process of transitioning from the current FlexiCadastre online platform to a new cadastre management system. The FlexiCadastre system is widely regarded as the global gold standard for trans - parent cadastre management and in this regard some stakeholders argue that the proposed change to a new cadastre management system could have significant negative impacts on Zam - bia’s mining industry and economy. The government, however, has assured stake - holders that the new system will enhance trans - parency, tighten control over processes and meet the country’s legal requirements. It remains to be seen whether the new system will deliver the improved transparency and accountability functionality that is highly sought after in the mining sector. The official launch of the new system is imminent. Impact of Energy Crisis on the Mining Sector Zambia’s goal to increase copper production to three million tonnes by 2032 faces challenges due to a significant power deficit. The country

relies heavily on hydroelectric power, which accounts for 84% of its 3,811 MW installed capacity, but has a current deficit of 1,381 MW, leading to ongoing power rationing. Mining, the largest energy consumer, accounts for 51% of Zambia’s energy use. In response, mining com - panies are sourcing power from neighbouring countries like Namibia and Mozambique at high - er costs, impacting profits and tax contributions. To address this, the Ministry of Energy launched the Integrated Resource Plan (IRP) in February 2024, aiming to secure a sustainable energy sup - ply over the next three decades. However, the plan faces funding challenges, with an estimated USD14 billion required for full implementation. Timely execution of energy projects is crucial to meet growing demand and ensure Zambia can achieve its copper production target by 2032. Additionally, the Zambian government through the Ministry of Energy enacted a statutory instru - ment in the form of the Electricity (Open Access) Regulations No 40 of 2024 (the “Open Access Regulations”) which provide the legal framework that allows for qualified participants to access and use the electricity transmission and distri - bution system in Zambia for a specified period. Among other things, the Open Access Regula - tions specify the application process for open access, transmission and distribution charges and the functions of the Zambia Energy Supply Corporation (ZESCO) and the Energy Regula - tion Board. The Open Access Regulations are intended to ensure fair access to the electricity market for various stakeholders, including con - sumers with a consumption capacity of at least 1 MW.

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