Kitwe, Zambia– In a strategic move to strengthen trade and investment ties, the EU Delegation to Zambia, together with the Zambian government and private sector organizations, hosted the EU-Zambia Copper Business Forum under the theme, ‘Growing the Copper Industry through Green Value Chains’ in April. The aim of the conference was to explore and capitalize on the vast potential of Zambia’s copper industry.
The forum is founded on a comprehensive study commissioned by the EU, which identifies 9 key areas with untapped potential for the expansion and growth of Zambia’s copper industry. As the global demand for copper is projected to nearly double by 2035, due to the green energy transition, the timing of the forum was particularly opportune. Furthermore, the demand for copper cables and wires is also expected to surge in Zambian and neighbouring markets due to increasing electrification and urbanization.
Adding to this favourable scenario, the Africa Free Continental Trade Agreement (AfCTA) makes way for new and extensive market access opportunities across 55 countries. Zambia’s recognized political stability, investment-friendly legislation, and ambition to become a regional hub further enhance its attractiveness as a business destination.
Recognizing the value of such an important event, some of The Critical Minerals Fund’s members attended the forum. Notably, investment banker and TCMF partner Tshepo Magagane not only participated in panel discussions, but was also interviewed by Financial Insight Zambia, where he took the opportunity to discuss The Critical Minerals Fund. Mr Magagane stressed the importance of how new copper will be financed.
As part of it’s ambitious strategy to elevate copper production to 3 million tons per annum (Mtpa), Zambia is set to unlock significant new mining potential. Achieving this will necessitate the development of 18 new mines, each potentially producing approximately 50,000 tons of copper per annum. To achieve this goal, Mr Magagane explained that a substantial investment framework should be established, encompassing various stages from exploration to project financing:
- Exploration– the initial phase of exploration will require an estimated USD 200 million in equity or equity-like capital.
- Resource Definition to Bankability– following successful exploration, the transition to resource definition and achieving bankability will demand an extra USD 1,5 billion in equity or equity-like capital.
- Project Finance– this is the most capital-intensive stage and will require approximately USD 8 billion.
- Total Investment of USD 10 billion– Zambia will need USD 10 billion in investments in order to meet its copper production target.
- Limited Focus on Africa– Despite the substantial investment needs, the current landscape of specialist funds presents a grave challenge. With approximately USD 17 billion in assets under management, less than 5% has been allocated to Africa.
This highlights a critical gap in available funding, emphasizing the need for targeted investment strategies and enhanced investor interest in the region such as The Critical Minerals Fund.
A significant portion of the forum was dedicated to facilitating B2B matchmaking, fostering connections between European and Zambian companies, and linking European investors with the Zambian government and other key stakeholders. It served as a reminder that The Critical Minerals Funds is well on its way to making a significant contribution to Zambia’s copper industry.
