Zambia is a landlocked country located in central Africa. Its total area is 75,300 square kilometers—just 2.5% of Africa’s total area. Yet, Zambia is a major producer of copper and cobalt resources, holding 4% of the world’s copper reserves and 3.9% of its cobalt reserves. In today’s era of soaring metal prices, Zambia’s abundant copper and cobalt resources have drawn increasing attention from global mining investors.
　　 I. Mineral Resources
　　 The entire territory of Zambia is part of the African Craton. The ancient Bangweulu block in the northeast is the most geologically stable region in Zambia’s history. The Kibaran tectonic movement of the Precambrian had a significant impact on the eastern half of Zambia, giving rise to extensive nappe structures. The tectonic event that exerted the greatest influence on Zambia’s current geological landscape was the Katanga Orogeny (also known as the Pan-African Orogeny), which occurred around 500 million years ago. As a result, the Lufilian Arc was formed in the central and north-central regions, the Mozambique Belt—a Late Paleozoic to Mesozoic tectonic zone—emerged in the southeast, and sedimentary basins were created in the western, southern, and southeastern parts of the country. These unique geological conditions have endowed Zambia with abundant mineral resources, particularly copper and cobalt, which hold an important position on the global stage. Zambia also boasts rich gemstone resources, especially emeralds. Other major minerals found in Zambia include gold, silver, iron, zinc, lead, selenium, manganese, nickel, tin, uranium, phosphorus, talc, gypsum, sulfur, coal, and clay.
　　 1. Copper
　　 Copper is Zambia’s most important mineral resource and holds a significant position worldwide. In 2006, its reserves stood at 19 million tons (with a reserve base of 35 million tons), accounting for approximately 4.0% of the world’s total reserves and ranking it tenth among countries worldwide. The primary copper deposits are sedimentary oxide or sulfide deposits, concentrated in the Zambian Copperbelt located in central-northern Zambia. This belt stretches roughly 200–250 kilometers in length, about 65 kilometers in width, and covers an area of approximately 50,000 square kilometers. The Copperbelt is clearly controlled by the Kafue Syncline structure. The ore deposits are arranged in a chain-like pattern along two north-west trending parallel trends, spaced about 30 kilometers apart, on either side of the syncline. To date, seven major stratabound deposits and two relatively smaller stratabound deposits have been identified. On the north-eastern limb of the syncline, the main deposits include Mufulira, Bwana M’Kubwa, and others; on the south-western limb, the principal deposits are Konkola, Nchanga, Chambishi, Baluba, Chibuluma, Nkana, and Luanshya.
The ore bodies in the copper mining belt are primarily hosted within sedimentary sandstones and shales of the Lower Luangwa Formation (Late Proterozoic) of the Katanga Group. Because these ore bodies occur in sedimentary rocks, they typically exhibit a tabular or lenticular shape, with strikingly long strike lengths. Their thickness varies from a few meters to over 60 meters, and their lateral extent can exceed 2,000 meters. Approximately 60% of the copper is concentrated in a single stratigraphic horizon—the so-called ore-bearing shale.
　　 In most ore deposits, the primary sulfide zones are arranged in bands that extend laterally and dip either obliquely or vertically. The sequence of these zones is chalcocite, bornite, chalcopyrite, covellite, and pyrite. This sequence reflects the changing water conditions—from shallow to deep—during periods of marine transgression and regression along ancient coastlines, and it illustrates the pattern of sulfide mineral transformations from initial deposition to remobilization. Weathering has disrupted this original mineralogical sequence: from the surface down to a depth of 500 meters, sulfide minerals have been altered into secondary minerals such as malachite, azurite, cuprite, native copper, and other secondary minerals. In addition to copper and cobalt ores, most of these deposits also contain small amounts of elements including gold, silver, selenium, and uranium.
　　 2. Cobalt
　　 It is another important mineral resource in Zambia and holds a significant position worldwide. In 2006, the country’s cobalt reserves stood at 270,000 tons (with proven reserves totaling 680,000 tons), accounting for 3.9% of the world’s total reserves and ranking fourth among all nations. These reserves are primarily concentrated in the Copperbelt region, specifically in the southwestern part of the Kafue Syncline. The majority of these reserves originate from associated minerals found in deposits such as Nchanga, Nkana, Chambishi, Chibuluma, Baluba, and Chingola. An exception is the Chingola deposit, where cobalt mineralization occurs in vein-like and banded forms, either below the copper ore bodies or within the surrounding rocks around the ancient basement uplifts. In this deposit, cobalt forms distinct ore bodies on its own and possesses exceptionally high mining value. In other deposits located on the western limb of the syncline, cobalt-bearing minerals are more or less intermixed with the copper ore bodies. However, due to their deep burial and extremely low grades, these deposits remain challenging to exploit at present.
　　 3. Iron
　　 Zambia’s iron ore deposits are mainly located southwest of Lusaka and near Mbumbwa, with hematite being the predominant mineral type. The Nambala iron ore deposit in Mbumbwa is a hematite deposit containing 20 million tons of iron ore with a grade of 62%, as well as 30 million tons of iron ore with a grade of 53%. There are seven major iron ore deposits in total: Pamba, Naghebuwe, Sanje, Chongwe, Nambala, Chibota, and Pepela. Among these, the Pamba and Naghebuwe mining areas are the most significant. The average ore grade is 62.4%, classifying these deposits as rich ores. To date, Zambia’s iron ore resources remain undeveloped and unutilized.
　　 4. Gemstone
　　 Zambia boasts extremely rich gemstone resources. The primary gemstone is emerald, with other notable gems including aquamarine, agate, garnet, tourmaline, amethyst, and diamond. Currently, there are no official, accurate reports available on the exact reserves of these gemstones. The main emerald-producing areas are located in the Ndola region and the Karomo area along the southern border. In recent years, several mining companies have conducted mineral exploration in these regions and have made new discoveries. In 2007, Gemfields Resources discovered a large emerald deposit in the Ndola region, with reserves estimated at 10,050 carats. Other gemstones are primarily found in the Lundazi region, about 600 kilometers northeast of Lusaka, as well as along Zambia’s eastern and southeastern borders. These gemstones are mainly hosted within tourmaline veins in basement gneisses, often occurring in contact zones.
　　 5. Phosphorus
　　 Due to the limited extent of survey and exploration studies, the proven reserves of phosphorus amount to only 40,000 tons. However, the actual resource potential is considerably greater; currently, seven promising carbonate rock deposits have been identified. One of these is located east of Ikaso in northeastern Zambia, two are situated in the southern and southeastern parts of Lusaka, and four are found in the southeast near the border with Mozambique. The Nkumbwa deposit, located 25 kilometers east of Ikaso, holds the greatest potential. This deposit forms a ridge approximately 1,500 meters long, 900 meters wide, and 330 meters high. At the top of the ridge, an outer layer of biotite breccia encircles a middle layer of brown and white ferroan dolomite carbonate rocks, which in turn are surrounded by an inner layer of silicified carbonate rocks. In these carbonate rocks, apatite mostly occurs as flattened hexagonal crystals. Preliminary surveys estimate that the ore reserves amount to around 500 million tons, with a phosphate (P2O5) content of 7.7%.
　　 6. Coal
　　 The main mining areas are located in Gwenmbe, on the northern side of Lake Kariba in Southern Province; Luano, at the headwaters of the Luangwa River in southeastern Kabwe in Central Province; and the Luangwa River itself. The major coal mines include the Maamba Coal Mine and the Nkandabwé Coal Mine. In addition, the Iguma Coal Mine has proven reserves of 14 million tons, and the Mulungwa Coal Mine has reserves of 15 million tons. Open-pit deposits have been discovered in the Luangwa River Valley, the Luano River Valley in Mkuhi, Central Province, Kahare in Koma, Western Province, and the Siambabala area in Gwenmbe. However, these deposits are of low quality, and their exact reserves remain unexplored.
　　 7. Petroleum
　　 Zambia only discovered oil in the past two years. On October 22, 2006, Zambian President Mwanawasa announced that the country had found both oil and natural gas in the Chavuma and Zambezi regions of its Northwestern Province. This discovery was made by the Geological Survey Department under Zambia’s Ministry of Mines and Mineral Development, following two rounds of sampling inspections. In the first round, nine out of 11 sampling points showed evidence of oil, while two showed natural gas. In the second round, 12 sampling points indicated the presence of oil, and six showed natural gas. The results of these samples have been confirmed by relevant German authorities.
　　 President Mwanawasa has announced the immediate establishment of an oil committee tasked with legally facilitating the exploration and production of oil by private enterprises in the region. The committee will be chaired by the Zambian Minister of Mines and Mineral Development, with the Minister of Energy and Water Resources serving as vice-chair. Its members include the Minister of Justice, the Minister of Finance and National Planning, and the President’s Special Legal Counsel, among others.
　　 8. Other minerals—including gold, silver, zinc, lead, selenium, manganese, nickel, tin, uranium, phosphorus, and talc—have been identified, though their known reserves are relatively limited. Gold and silver are primarily found as associated minerals in copper-cobalt deposits along the central-northern copper belt. Additionally, small deposits are scattered in the southeastern border region. Lead and zinc are concentrated mainly in the Kabwe lead-zinc deposit, located about 110 kilometers north of Lusaka. The primary source of tin is the Lusaka tin deposit in the Southern Province; manganese is predominantly distributed in the northeastern and central regions, with the largest deposit being the Mansa mine, situated west of Lake Bangweulu. Zambia’s manganese resources hold certain potential, but further exploration is needed. Nickel deposits are mainly located east and south of Lusaka. The discovered uranium deposits are concentrated in the northwest and southern regions and also show considerable potential. Talc is primarily found in the central and central-northern regions.

　　 II. Mining and the Economy
　　 Zambia is classified as a least developed country and a heavily indebted poor country. Its economic structure is relatively simple, with mining being the dominant sector, although agriculture and tourism also play significant roles. After independence, the economy experienced relatively rapid growth until the mid-1970s. However, since then, due to factors such as declining international mineral prices and misguided government policies of nationalization, the economy has fallen into serious difficulties. Since the multi-party democratic movement came to power, the government has vigorously pursued an economic restructuring program and implemented privatization reforms, achieving some positive results. In 2005, Zambia reached the completion point for its Heavily Indebted Poor Countries (HIPC) initiative, receiving substantial debt relief. As a result, its external debt fell from $5.5 billion at the end of 2005 to $635 million by the end of 2006. In 2007, the government released the "National Five-Year Development Plan" and the "Vision 2030," setting a goal of transforming Zambia into a middle-income industrial nation by 2030. That year, the economy performed generally well: GDP was estimated to have grown by 6.2%, the annual inflation rate was projected at 10.6%, the exchange rate remained stable and appreciated slightly, and international trade recorded a substantial surplus. Agriculture, tourism, and construction continued to grow at a relatively fast pace; however, the mining sector slowed down due to the impact of floods. In 2006, the country's GDP was estimated at $10.5 billion, with per capita GDP at approximately $1,258 (based on an average exchange rate of 3,603 kwacha per U.S. dollar in 2006).
　　 Mining plays a crucial role in Zambia’s economic development, with copper and cobalt mining and smelting forming its core activities. The success or failure of the mining sector directly determines the rise and fall of Zambia’s economy. Since independence, the mining industry has developed relatively rapidly, thereby boosting the country’s economic growth. However, starting from the mid-1970s, the mining sector’s progress stalled, and copper production began to decline year after year. The primary reasons for this stagnation include outdated mining equipment, backward production technologies, and the gradual depletion of proven ore reserves. To enable these enterprises to thrive, substantial investments are needed to upgrade equipment and launch new projects. Such investments require enormous capital, yet most companies at the time were financially strapped, heavily indebted, and unable to shoulder this burden on their own. To reverse this situation, since the 1990s, the government has made it a top priority to improve the investment climate and vigorously attract foreign investment as a key driver of mining sector development. Major measures taken include: fully implementing a market economy and accelerating the privatization process; strengthening the regulatory framework for mining activities and enacting a new Mining Act; establishing a stock exchange and improving the country’s financial system, as well as adopting a freely floating exchange rate; reducing trade barriers; lifting price and import controls; and lowering commercial taxes. Before 1970, Zambian copper mines had been privately owned. In 1970, the Zambian government initiated a nationalization reform, reorganizing the copper mining enterprises into two entities: the Roan United Copper Mines Company and the Nchanga United Copper Mines Limited. In 1982, these two companies were further merged to form the Zambia Consolidated Copper Mines (ZCCM), which became the world’s second-largest copper mining company at the time. Starting in 1991, the Chiluba administration strongly promoted the privatization of copper mines. By 2000, with the completion of the privatization of the Zambia Consolidated Copper Mines (ZCCM), Zambia officially ended the era of state-owned enterprises dominating and operating the copper mining industry, an era that had begun in 1970.
　　 Since entering the 21st century, thanks to the substantial rise in international metal prices, Zambia’s copper production has rebounded rapidly. In 2000, copper output was only 249,000 tons, but by 2006 it had already reached 5.14 million tons. The significant increase in mining output has also boosted Zambia’s economic development. The share of mining output in GDP rose from 5% in 2000 to 11.8% in 2006. The number of people employed in the mining sector increased from 35,355 in 2000 to 58,108 in 2007.
　　 Copper and cobalt mineral products are also a major source of foreign exchange for the country. In 2006, exports of copper and cobalt minerals generated a substantial increase in foreign exchange earnings, reaching 4 billion U.S. dollars—a two-fold increase compared to 2005—and accounting for 70% of the nation's total merchandise exports.

　　 III. Current Status of Mineral Resource Development

　　 Zambia is one of the world’s major producers of copper and cobalt, accounting for 3% and 12% respectively of global production. Zambia is also among the world’s leading producers of gemstones—particularly emeralds. Other key mineral products include gold, silver, sulfur, coal, cement, clay, and stone materials (see Table 1).
　　 1. Copper and cobalt
　　 In 2006, Zambia’s mine production of copper (in metal terms) was estimated at 514,000 tons, representing a 15% increase over the previous year. (According to revised data from the U.S. Geological Survey’s “Mineral Commodity Summaries, 2008,” Zambia’s copper production in 2006 was 476,000 tons, up 9.2% from the previous year.) This placed Zambia at 10th in the world ranking. Zambia is also Africa’s largest copper producer, accounting for approximately 64.5% of the continent’s total copper output. In 2006, Zambia’s cobalt production was about 8,000 tons, a 14% decrease from the previous year, ranking it second globally. The major copper and cobalt mining operations include:
　　 1) The Kansanshi copper-cobalt mine is located 15 kilometers north of Solwezi in the Northwestern Province and just 16 kilometers from the southern border of the Democratic Republic of the Congo. Proven ore reserves amount to 267 million tons, with grades ranging from 1.5% to 3%. In 2006, its production capacity reached 12 million tons of ore. Currently, it is Zambia’s largest copper mine. The mine is operated by Kansanshi Mining Company, in which First Quantum Minerals Ltd (a Canadian company) holds a 79.4% stake and the Zambian Consolidated Copper Mines Holdings Ltd holds a 26.6% stake. According to 2006 statistics, $290 million had already been invested in mining operations, with an additional $70 million allocated for high-pressure oxidation and filtration processes.
　　 2) The Konkola Copper-Cobalt Mine. Proven ore reserves amount to 250 million tons, with a grade of 3.8%. In 2006, its annual production capacity was 2.4 million tons of ore. The operator of the mine is Konkola Copper Mines Ltd. Originally operated by the Anglo-American Group, the mine was divested in 2002. In 2005, the Indian holding company Vedanta took over, and currently holds a 51% stake in Konkola Copper Mines Ltd. Zambia Copper Investments Ltd. and Zambia Consolidated Copper Mines Holdings Ltd. respectively hold the remaining 28.4% and 26.6% of the equity. The company plans to invest an additional 400 million U.S. dollars in expansion. Once the expanded facilities come on stream in 2009, annual copper concentrate production could increase from the current 2 million tons to 6 million tons. Furthermore, a new deposit covering an area of 4,300 hectares and containing proven ore reserves of 100 million tons has been discovered north of the Konkola mine.
　　 3) Nchanga Copper-Cobalt Mine. Primarily composed of sulfide and oxide ores, the mine has proven reserves of 206 million tons. In 2006, its production capacity was 7.3 million tons of ore, making it currently Zambia’s largest open-pit copper mine. The upper ore body is mined via open-pit mining, with an annual production capacity of 4.5 million tons of ore and an average grade of 2.3%; the lower ore body is mined underground, with an annual production capacity of 2.8 million tons of ore and an average grade of 3.7%. The mine is owned by Konkola Copper Mines Company.
　　 4) The Nkana Copper-Cobalt Mine and the Mufulira Copper-Cobalt Mine. These two mines have proven ore reserves of nearly 100 million tons, with an average grade of 2.3%. The ore bodies are primarily composed of chalcopyrite, cuprite, and bornite. Both mines operate under underground mining methods. In 2006, their respective production capacities were 5 million tons and 2.5 million tons of ore. Mopani Copper Mines holds the mining rights to both mines. Mopani Copper Mines is a joint venture controlled by Carlisa Investment Company (which holds a 90% stake), a subsidiary of Carlisa, a company jointly established by Switzerland’s Glencore International AG (holding 81.2%) and Canada’s First Quantum Minerals. Zambia Consolidated Copper Mines Holdings owns the remaining 10% stake.
　　 In addition, there is the Chambishi copper mine, with an annual production capacity of 800,000 tons of ore (capable of producing approximately 50,000 tons of copper concentrate). Its operator is NFC Africa Mining plc (in which China Nonferrous Metal Construction Group Co., Ltd. holds an 85% stake). The Baluba copper mine operates under underground mining, with an annual production capacity of 1.4 million tons of ore; its operator is Luanshya Copper Mines Ltd. The Chibuluma copper-cobalt mine has an annual production capacity of 480,000 tons of ore (capable of producing 15,000 tons of copper concentrate), and its operator is Chibuluma Mines plc.
Zambia currently has several copper mines under development, including Lumwana, Mokambo, and Mkushi. Lumwana, located in the Northwestern Province, has proven ore reserves of 102 million tons with a grade of 1.1%. It is reportedly one of the world’s largest undeveloped copper deposits. Australia’s Equinox Mining Company plans to invest US$583.8 million in developing this mine and has already spent over US$400 million. The project’s steel-structure buildings in most areas have largely been completed, and civil engineering works are now finished. The mine is expected to begin commercial production in the second half of 2008, with an average annual copper metal production capacity of 150,000 tons. The mine’s operational lifespan is projected to be 37 years.
　　 In 2007, Canada-based ICS Copper System of Zambia raised US$10 million from securities markets in Canada and Europe, planning to reopen the Mokambo copper mine located in Mufulira, Zambia. The mine had been closed in 1974. The Mokambo project is a joint venture between the company and Zambia’s North Western Plant Hire, with ICS Copper System of Zambia holding a 70% stake and North Western Plant Hire holding a 30% stake. In 2007, Zambia’s Environmental Agency held a public hearing on the project’s environmental impact assessment report. To date, ICS Copper System of Zambia has drilled 16 boreholes; according to requirements, a total of 136 boreholes need to be drilled. The company plans to raise a total of US$50 million for the mine’s development and expects the mine to begin operations in 2009.
　　 In July 2007, the Zambian Environmental Commission issued a statement announcing that it had approved the development of the Mkushi copper mine in central Zambia as well as the construction of a copper smelter in Ndola. African Eagle Resources and CGA Mining will develop the Mkushi copper mine, while Triple Plate Junction will build the copper smelter. These companies must commence development of these projects within three years; otherwise, their approvals will be revoked.
　　 2. Nickel
　　 Zambia had never before produced nickel ore. In April 2008, the Munali nickel mine, located in Zambia’s Southern Province, produced its first batch of nickel, copper, and cobalt ores, marking the end of Zambia’s history of not producing nickel ore. The Munali nickel mine broke ground on April 3, 2007. The project is primarily funded by Albiden, an Australian company founded in 2000, which plans to invest 100 million U.S. dollars in the mine’s construction. The mine has nickel reserves of approximately 100,000 tons. As Zambia’s first nickel mining project, it is scheduled to be completed and put into operation by mid-2008, with an annual production capacity of 8,500 tons of nickel. Additionally, the mine will produce 1,400 tons of copper, 400 tons of cobalt, and 15,000 ounces of platinum-group metals. China’s Jinchuan Group, Asia’s largest nickel producer, is also involved in the development of this project.
　　 3. Coal
　　 Zambia’s coal production is relatively low, with bituminous coal being the primary type. Annual output stands at just over 200,000 tons, compared to only 100,000 tons in 2006. The main mining areas include the Maamba Coal Mine and the Collum Coal Mine, located in the Southern Province. The operator of the Maamba Coal Mine is Maamba Collieries Ltd., a wholly government-owned company. This mine is the only coal mine currently operated and mined by the Zambian government. The Maamba Coal Mine is situated 350 kilometers south of Lusaka. Its coal seams reach a maximum thickness of 10 meters, with an average thickness of 5.5 meters. Estimated reserves total 78.2 million tons, of which 60.2 million tons have been proven. Approximately 30 million tons of these reserves are classified as easily extractable coal. The mine’s average moisture content is 2%, ash content is 17.5%, volatile matter is 18.5%, and fixed carbon is 59%. The mine’s annual production capacity ranges from 600,000 to 800,000 tons. The company’s coal-processing plant can handle 700,000 to 800,000 tons of coal annually, while a conveyor belt system can transport 600,000 to 700,000 tons of coal per year to the Masuku railway station. At one time, this mine was the country’s leading domestic coal supplier, and during periods of high production, it even exported significant quantities of coal. However, for many years, due to inadequate equipment maintenance and upgrades, coupled with the government’s inability to allocate sufficient funds for expanding production, output has been declining sharply. In 2006, the mine was forced to shut down following a water-intrusion incident. Currently, the government is considering privatizing this coal mine. The operator of the Collum Coal Mine is Collum Coal Mining Industries Ltd., and its production capacity in 2006 was 120,000 tons.
　　 4. Gemstone
　　 Zambia produces a wide variety of gemstones, including emeralds, beryls, garnets, tourmalines, and amethysts. However, gemstone mining is largely carried out by small private enterprises that are relatively small in scale and have low processing standards. Most gemstones are traded through informal channels, resulting in incomplete statistical data. In 2007, Zambian officials estimated the annual value of Zambia’s gemstone production at about 7 billion U.S. dollars. Yet due to rampant illegal exports, roughly 50% of the profits are lost overseas. The Zambian government plans to establish a gemstone exchange to bring gemstone trading into the formal market. In 2007, the Zambian president stated that during his term he would enact legislation to completely eliminate illegal gemstone exports, with violators facing prison sentences of no less than 15 years.

　　 IV. Mining Rights Management
　　 The government authority responsible for Zambia’s mining sector is the Ministry of Mines and Mineral Development. Its primary functions include formulating and implementing policies and plans related to the mining industry. Zambia’s current mining legislation is the Mines and Minerals Act, adopted in September 1995. This Act covers all types of minerals. According to the law, anyone intending to carry out mineral exploration and development activities within Zambia must first obtain a mining license issued by the Ministry of Mines and Mineral Development. Currently, the mining licenses issued mainly include the following types:
　　 1) Large-scale exploration license: valid for 2 years, renewable twice—each renewal period not exceeding 2 years for the first renewal and not exceeding 1 year for the second renewal.
　　 2) Retention of Permit: If the holder of a prospecting permit is confident that the exploration area contains mineral deposits with potential commercial value, but market conditions currently do not yet meet the requirements, the holder may apply to retain the permit. The retention period is three years and can be extended once for another three-year term.
　　 3) Large-Scale Special Mining Permit: Holders of a Large-Scale Exploration Permit are entitled to obtain a Special Mining Permit. Those who have not obtained a Large-Scale Exploration Permit may also directly apply for a Large-Scale Special Mining Permit in unallocated areas. The validity period is up to 25 years, and it can be extended for another 25 years.
　　 4) Small exploration license: valid for no more than 2 years, with an exploration area not exceeding 10 square kilometers;
　　 5) Small-scale mining permit: The validity period is 10 years, and with approval from the competent authority, the permit may be extended, but the extension period cannot exceed 10 years. The area of the mining district shall not exceed 400 hectares. An exception applies to gemstone mining, where the area of the mining district shall not exceed 5 hectares.
　　 Applicants must first obtain a registration form from the Mining Development Authority. Each form costs 15 kwacha (the standard rate in the early 1990s; the same applies hereafter). After completing the form according to the relevant regulations, applicants should return it to the Mining Development Authority. Once the form has been reviewed and approved by the competent authorities, applicants must pay a prescribed fee to receive the requested license. The fee for a precious-metal mineral exploration license is 500 kwacha, while the fee for a mining license is 5,000 kwacha. In addition, depending on the area applied for exploration or mining, a yearly fee of 50 kwacha per hectare will be charged. When a mine is closed down, the license holder must submit a closure report to the Mining Development Authority. Only after the report has been reviewed and approved, and the license holder has obtained the closure certification issued by the Mining Development Authority, may the mine be officially closed. The total fees collected annually from issuing various types of licenses amount to approximately 4 million kwacha, all of which are required by law to be remitted to the national treasury.

　　 V. Adjustments to Mining Policies and Regulations in Recent Years
　　 1. The Zambian government will significantly increase the average effective tax rate on the mining industry.
　　 In January 2008, the Zambian government announced that starting April 1, 2008, royalty rates would increase from 0.6% to 3%, and the corporate income tax for mining companies would rise from 25% to 30%. In addition, Zambia will impose a variable profit tax of 15% on profits exceeding 8% of gross revenue, as well as a windfall profits tax of at least 25%. Under this proposed tax hike, the average effective tax rate for Zambia’s mining industry will rise to 47%. This is expected to generate an additional $400 million in tax revenue for the Zambian government during fiscal year 2008.
　　 In the 1990s, a wave of copper mine privatization swept across Zambia. At that time, international copper prices were at a low ebb. To attract investment, the Zambian government imposed only a 0.6% mineral resource royalty and a 25% corporate tax on copper mining enterprises, resulting in a relatively low average tax burden for the mining industry. The government now estimates that Zambia’s mining sector currently faces an average effective tax rate of just 31.7%, significantly lower than that of its neighboring countries. In recent years, international prices for mineral commodities have risen sharply. However, due to the excessively low tax burden on the mining industry, the Zambian people have not been able to fully benefit from the surge in global copper prices. The vast wealth generated by the country’s mineral resources has largely been captured by foreign mining companies. To ensure that Zambia can reap the benefits of soaring international copper prices, the government should raise relevant taxes.
　　 The scale of this tax reform is significantly greater than the tax reform proposal put forward a year and a half ago. In October 2006, the Zambian government proposed increasing the royalty rate to 3% and raising the corporate income tax for mining companies by 5 percentage points. However, due to unanimous opposition from mining companies, the proposal was never implemented. The current tax hike proposal has also drawn strong opposition from mining companies. Nevertheless, the Zambian government insists that it will not reverse its decision, arguing that the tax increase will not jeopardize the viability of Zambian mining companies, as their return on investment continues to remain above the global average.
　　
　　 2. The government will enact a separate uranium mining law.
　　 In the past, Zambia had few uranium deposits, and no separate legislation was enacted specifically for uranium. Instead, uranium mining was regulated alongside other mineral resources under the Mines and Minerals Act. In recent years, new uranium deposits have been discovered in Zambia, drawing increasing attention from the government. Currently, the majority of known uranium resources are concentrated in the northwest and southern regions, though it is believed that uranium deposits also exist in other parts of the country. Given the special status of uranium, in compliance with the requirements of the International Atomic Energy Agency, Zambia has already drafted a Uranium Mining Act. Once this law is finalized through consultations with relevant UN agencies, it will be promulgated and implemented, at which point mining companies will be able to apply for uranium mining licenses. The law will allow foreign companies to carry out uranium exploration over a broader geographic area.
　　 3. Revoke the mining license for the idle copper mine.
　　 In early 2008, the Zambian government decided to revoke the licenses of foreign copper mining companies that had failed to carry out exploration or mining activities within seven years in regions rich in copper deposits. This move was intended to encourage other investors to explore and develop mineral resources in these previously idle areas. At the same time, the government also encouraged Zambians to acquire these mining rights and invest in the development of the region's mineral resources.
　　 VI. International Assessment of the Mining Investment Environment
　　 Zambia boasts abundant mineral resources, political stability, and favorable investment policies—factors that have created a conducive environment for attracting mining investments and made it one of the regions of growing interest to international mining investors. However, in recent years, policy instability has become a significant concern. This includes substantial increases in taxes levied on mining companies, heightened government intervention in mining activities, inadequate regulatory capacity, and underdeveloped infrastructure—all of which have had a notably negative impact on mining investment. According to the 2006/2007 Global Mining Companies Survey released by Canada’s Fraser Institute, Zambia’s overall mining investment climate ranked in the middle-to-lower tier, placing it roughly midway among the nine African countries surveyed. In particular, its “Policy Potential Index”—which measures indicators such as political stability, policy clarity, regulatory enforcement, environmental considerations, environmental controls, taxation, land tenure systems, relevant economic agreements, geological databases, safety, and labor issues—ranked 50th, placing it toward the lower end of the spectrum among the nine African nations and ahead of only Zimbabwe, the Democratic Republic of the Congo, and South Africa, at sixth place. While this index showed some improvement compared to the previous year—when Zambia ranked 57th globally—the current year’s score for mineral potential under existing regulations and land-use restrictions improved significantly. Last year, Zambia scored 0.27 and ranked 53rd; this year, its score rose to 0.61, placing it 32nd—a gain of 21 positions—and putting it in the global middle range.

　　 VII. Current Status and Prospects of China-Zambia Mining Cooperation
　　 China and Zambia established diplomatic relations on October 29, 1964. Zambia was the first country in Southern Africa to establish diplomatic ties with China. The two countries enjoy a deep-rooted traditional friendship, and their bilateral relationship has continued to develop steadily. During President Kaunda’s tenure (1964–1991), the Tanzania-Zambia Railway—the railway that China aided Zambia in building—became a landmark symbol of China-Zambia and even China-Africa friendship. After the multi-party democratic movement came to power in 1991, China-Zambia relations continued to flourish on the basis of the existing foundation. Under the new circumstances, the two sides have stepped up economic cooperation and achieved remarkable results, while their political friendship has been further strengthened. Zambian leaders refer to China as a “trustworthy, all-weather friend.”
　　 China and Zambia have signed several bilateral agreements covering trade, investment promotion and protection, as well as various economic and technological cooperation arrangements. As of January 1, 2005, China has granted tariff-free treatment to certain Chinese products exported to Zambia. In 2007, the total trade volume between China and Zambia reached 595 million U.S. dollars, representing a year-on-year increase of 59.7%. Of this total, China’s exports amounted to 198 million U.S. dollars, while its imports from Zambia totaled 397 million U.S. dollars. China primarily imports copper from Zambia and exports machinery, electrical equipment, high-tech products, and textiles and apparel to Zambia.
　　 In recent years, China-Zambia economic and trade cooperation has continued to make steady progress, particularly in the area of mineral resource development. Many Chinese enterprises have begun investing in Zambia’s mineral resource development projects and have achieved impressive results. According to preliminary statistics from China Nonferrous Metal Construction Corporation, there are currently more than eight Chinese enterprises involved in mineral resource development investments in Zambia. These enterprises primarily focus on copper mining and smelting, while others are mainly engaged in the development of coal, nickel, and manganese resources. The total investment by these enterprises has exceeded 200 million U.S. dollars, and they employ over 2,500 local workers. The Chambishi Copper Mine rehabilitation project in Zambia is China’s largest investment project in Zambia. The planned investment amounts to 150 million U.S. dollars, and the project is jointly operated by China Nonferrous Metal Construction Corporation (CNMC) and Zambia’s National Copper Mines Corporation. As the first nonferrous metal mine approved by the Chinese government for overseas development and construction, the Chambishi Copper Mine represents a landmark project in China-Africa cooperation.
　　 The Chambishi copper mine was originally an old mine—a typical sedimentary copper deposit located along the world-famous Zambia-Congo copper belt. The mine boasts substantial reserves and high-grade ore. To date, proven copper reserves and resources within the mine’s mining area have reached 5.01 million tons, with an average copper grade of 2.19%. At the end of the last century, the Zambian government put its assets up for sale. In 1998, China Nonferrous Metal Construction Corporation participated in the acquisition of the Chambishi copper mine in Zambia. In June 1998, China Nonferrous Group and the Zambia Consolidated Copper Mines signed an agreement to jointly establish China Nonferrous Africa Mining Company, with the Chinese side holding an 85% stake. In September of that year, the company took over all assets of the Chambishi copper mine and officially commenced construction on July 28, 2000. Through the joint efforts of both China and Zambia, the Chambishi copper mine officially began production in July 2003. At the same time, a beneficiation plant with a daily processing capacity of 6,500 tons was completed, and pilot production—from mining to beneficiation—was successfully carried out. In 2004, the mine produced a total of 50,000 tons of copper concentrate, generating sales revenue of 51.21 million U.S. dollars. In 2005, the mine produced 21,000 tons of copper concentrate. By 2006, the mine’s annual production capacity had reached 800,000 tons of ore, capable of yielding approximately 50,000 tons of copper concentrate. Currently, the mine employs nearly 200 Chinese management and technical personnel as well as more than 1,000 Zambian workers.
　　 China Nonferrous Construction Africa Mining Co., Ltd. holds the land-use rights for 41 square kilometers of surface area in the Chambishi mining district, which is fully equipped with essential infrastructure—including hydropower, transportation, communications, and living amenities. By 2006, the company had invested a total of 180 million U.S. dollars and had successively built supporting facilities such as the BGRIMM explosives plant (which was destroyed in an accident in April 2005 and is currently under consideration for reconstruction), a casting and forging plant, a machinery repair workshop, a water treatment plant, and the China-Zambia Friendship Hospital. Due to the high cost of transporting copper concentrate back to China, the concentrate can only be sold locally. If a smelting plant were built locally to refine the copper concentrate into crude copper before shipping it back to China for further refining, not only would transportation costs be significantly reduced, but the severe shortage of domestic copper resources could also be effectively alleviated. To this end, the China Nonferrous Metals Group has invested 15 million U.S. dollars in the construction of a hydrometallurgical smelting plant. In September 2007, the Chambishi hydrometallurgical smelting plant officially began operations. The China Nonferrous Metals Group will also invest an additional 200 million U.S. dollars in Zambia to build a crude copper smelting plant at Chambishi with an annual capacity of 150,000 tons of copper, thereby enhancing the added value of exported copper. Relying on the Chambishi copper mine, the China Nonferrous Metals Group plans to establish the China Nonferrous Industrial Park, increase its investment efforts, and actively attract Chinese enterprises to invest in Zambia, fostering faster economic development in the region and achieving mutually beneficial and win-win outcomes.
　　 In March 2006, Yunnan Copper (Group) Co., Ltd., China’s third-largest copper company, signed a comprehensive cooperation framework agreement with China Nonferrous Mining Group Co., Ltd. Under the agreement, Yunnan Copper Group will increase its investment in the Chambishi Copper Mine in Zambia, which is controlled by China Nonferrous Mining Group, thereby expanding the mine’s production capacity. According to the agreement reached by both parties, Yunnan Copper Group and China Nonferrous Mining Group will jointly develop the western and southeastern ore bodies of the Chambishi Copper Mine, ultimately bringing the mine’s annual copper concentrate production capacity up to 110,000 tons of copper content. Additionally, the two companies will jointly invest in the construction of a crude copper smelter with an annual capacity of 150,000 tons locally; all products from the crude copper smelter will be transported back to China for sale.
　　 China’s Jinchuan Group, Asia’s largest nickel producer, is involved in the development of the Mwana Nickel Mine project in Zambia’s Southern Province. The project is being developed with investment from Australia’s Albidon Company. At the end of 2006, Jinchuan Group signed a supply agreement with Albidon Company, under which all nickel concentrates and other metals produced at the Mwana Nickel Mine will be sold exclusively to Jinchuan Group. Meanwhile, Jinchuan Group provided $20 million in funding for the construction of the nickel mine.
　　 In Zambia, there are several privately-owned copper smelters, including Tianheng Mining. These enterprises require relatively small investments and have achieved good economic returns, especially as international copper prices have risen.
　　 CHIMAN Company, located in the city of Kabwe, is invested in by a private enterprise from Liaoning Province. In 2004, the company acquired a manganese mine in Zambia with proven reserves of 4 million tons of ore. The company has now completed all necessary registration procedures, and the relevant equipment is being gradually delivered. Once the mine begins operations, the extracted ore will be transported back to China via the Tanzania-Zambia Railway and sea routes.
　　 Collum, located in the Choma area of Southern Province, is a coal mine invested in by a Chinese private enterprise. The total investment to date is approximately 1.5 million U.S. dollars. Production began in 2003, with an output of about 20,000 tons in 2004. By 2006, the mine’s production capacity had reached 120,000 tons. Currently, the mine has only one shaft, but another shaft is under construction. Once both shafts are fully operational, the mine’s annual production capacity could reach 200,000 tons.
　　 Currently, mining cooperation between China and Zambia is going quite smoothly. Zambia boasts exceptionally favorable resource conditions, particularly abundant reserves of copper and cobalt, which are highly complementary to China’s needs. The two countries enjoy a friendly relationship, and Chinese enterprises have many advantageous conditions for engaging in mineral exploration and development here. We believe that in the future, an increasing number of Chinese companies will participate in Zambia’s mineral resource development activities.

Primary reference materials:

1. USGS, Minerals Yearbook, 2001, 2002, 2003, 2004, 2005, 2006
2. Mineral Commodity Summaries, 2008
3. Fraser Institute Annual Survey of Mining Companies, 2006/2007