Zambia’s Green Ambitions: Transforming Mineral Wealth into Lasting Prosperity

The World Bank, in collaboration with the Resilient and Inclusive Supply Chain Enhancement (RISE) program, the Extractives Global Programmatic Support (EGPS), and the International Finance Corporation (IFC), has produced a landmark strategy to reposition Zambia in the global energy transition. The report offers a whole-of-government roadmap to harness the country’s endowment of energy transition minerals (ETMs), notably copper, cobalt, nickel, manganese, and lithium, for long-term, inclusive development. With the global clean energy transition fueling unprecedented demand for these minerals, Zambia is uniquely placed to contribute to global sustainability while transforming its economy. The roadmap outlines not only opportunities but also a candid assessment of structural gaps in policy, infrastructure, and institutional capability that must be addressed.

Ambitious Copper Goals Confront Realistic Constraints

Zambia has set a bold goal to triple its copper output from 800,000 metric tons in 2021 to 3 million metric tons by 2031. However, projections by the World Bank based on current conditions suggest this target is more realistically achievable by 2042. Two scenarios, business-as-usual and an unconstrained growth model, were used to evaluate Zambia’s production trajectory. The constrained model anticipates modest growth due to persistent barriers in infrastructure, electricity supply, and policy volatility. Meanwhile, the unconstrained scenario, which assumes accelerated reform and infrastructure investment, envisions the 3 million ton mark being reached a decade later than planned. Essential enablers include regulatory stability, increased electricity supply, cleanup of dormant mining licenses, and critical geological mapping. Currently, only 55% of Zambia is geologically mapped, which limits investor confidence and delays exploration.

A $70–90 million countrywide geological survey has begun, employing modern airborne mapping and electromagnetic techniques. However, insufficient funding, only $17–20 million has been allocated over two years, threatens its timeline. The report cautions that keeping geological data private or delaying its dissemination could also deter investment, especially as most successful mining countries treat such data as a public good. Beyond new mining prospects, the roadmap encourages reevaluating "stranded assets", deposits once considered uneconomical that might now be viable due to better technology and shifting market dynamics.

Revamping the Investment Climate and Governance

Effective governance is central to Zambia’s mining future. The creation of a semi-autonomous Minerals Regulation Commission (MRC) is a cornerstone reform aimed at insulating mining oversight from political influence, enhancing transparency, and improving regulatory enforcement. However, legal and operational gaps remain in the MRC framework, especially in areas such as environmental monitoring, digital licensing, and the rights of artisanal miners. The report recommends swift operationalization of the MRC along with supporting regulations drafted with international legal assistance. Moreover, the ZCCM Investment Holdings (ZCCM-IH), the state’s mining investment vehicle, requires professionalization. Despite declaring a profit, most of its subsidiaries posted losses in 2023, with limited transparency around reinvestments.

The government's consideration of a special purpose vehicle to hold production shares and trade minerals, potentially collecting 30% of output, is treated with caution by the World Bank. Such production-sharing models are rare in mining and, if not carefully designed, could undermine mine profitability and investor interest. A 30% physical take could function as an excessive royalty, rendering most Zambian mines uneconomic, especially those operating with tight margins. Alternative revenue-sharing models, such as preferred shares or retractable dividends, are proposed to align public benefit with private sector viability.

Local Industry Needs a Competitive Boost

Despite being a top copper producer, Zambia’s local manufacturing sector is underperforming. Only about 15,000–17,000 tons of copper cathode are consumed domestically annually, compared to 371,000 tons exported in 2023, down from over 1 million in 2014. Most copper rod, wire, and cable producers operate below 50% capacity. Access to competitively priced cathodes is a major hurdle, with local manufacturers receiving minimal discounts. Power outages, sometimes lasting 12 hours a day, also erode competitiveness, even though Zambia’s electricity rates are relatively low. To keep operations running, manufacturers resort to expensive diesel generators, which inflate costs dramatically.

Access to affordable finance is another stumbling block. Interest rates of 25% or higher make it nearly impossible for small- and medium-sized enterprises (SMEs) to grow. The roadmap highlights the need for innovative financial instruments, including blended finance, equity schemes, and targeted subsidies. A competitive investment environment will also require tariff reforms, simplified export procedures, and a modernized special economic zone (SEZ) strategy. Current SEZs suffer from weak infrastructure, unclear incentives, and overlapping regulatory mandates.

Tapping into Regional Trade and Green Supply Chains

Zambia's strategic location gives it unique access to the regional ETM market, including South Africa and the Democratic Republic of Congo. Yet, inefficiencies in trade logistics are undermining its potential. Transporting copper to ports takes up to 14 days and costs up to $200 per ton. Bureaucratic delays at border crossings, insufficient coordination between agencies, and the high-risk classification of all ETM exports exacerbate the challenge. The roadmap recommends introducing special trade regimes for ETM exporters, improving corridor infrastructure, and fast-tracking the implementation of a national single window for customs processing.

There is also a call to reduce non-tariff barriers and align with regional carbon standards, especially as emission intensity becomes a factor in global trade. With the right policy mix, Zambia could not only reclaim its share of copper product exports but also diversify into battery components, transformers, and electric mobility parts for the regional market. Such growth could yield over $3 billion in additional revenue and generate tens of thousands of new jobs.

Building a Greener, Safer Mining Future

Environmental and social sustainability round out the roadmap’s vision. Zambia’s long mining history has left behind waste sites, slag heaps, tailings, and contaminated soil that require urgent assessment. Some of these sites offer opportunities for metal recovery using modern technologies, while others present serious environmental and public health risks. The report urges alignment with the Global Industry Standard on Tailings Management and recommends a full inventory of legacy sites.

Artisanal and small-scale mining (ASM), which contributes modestly to copper output but significantly to livelihoods, is prioritized for formalization. New gold aggregation centers, a proposed ASM support fund, and training initiatives are expected to increase safety, regulatory compliance, and incomes in the sector.

In sum, Zambia’s roadmap is a bold yet clear-eyed framework for translating mineral wealth into inclusive and sustainable development. By modernizing institutions, investing in infrastructure, nurturing local industries, and safeguarding the environment, the country stands to emerge not just as an ETM supplier but as a global model for green economic transformation.