Western mining companies are quitting the Copperbelt Province as its dominance fades away. This is following recent investigations on alleged mismanagement.
According to the recently published report, producing 70% of the world’s cobalt, the Copperbelt is in the midst of a sweeping transformation. China’s mining companies are allegedly eyeing the potential sale of assets such as Vedanta’s Konkola Copper Mines (KCM) in Zambia and Glencore’s mothballed Mutanda mine in Congo-Kinshasa, as they seek to expand their access to the metal.
As such, the acquisition of Copperbelt assets and consolidation of political ties with Lusaka and Kinshasa would thus serve to enable China’s companies to extend their control of supply chains in the high-tech sector. This, in turn, will act as a revamp to the region’s mining sector. Moreover, it also fits with a shift in China’s strategy in Africa to focus more on private companies’ operations, rather than state-backed mega projects.
According to media reports, Western mining companies’ dominance in the Copperbelt is fading, owing partly to changing political conditions and business strategies while an economic war between the United States and China escalates. Zambia has long had Chinese mining companies, small and medium scale operators, on the Copperbelt.
However, President Lungu’s accumulated debts to the Chinese companies have resulted in a state of stalemate in which the latter have made requirements to get collateral, perhaps in the form of other mining assets.
The Chinese companies will also seek to benefit from the liquidation of KCM. Media reports also suggest that they are also watching First Quantum Minerals (FQM), the country’s largest producer, which operates Kansanshi and Sentinel mines.
Government-owned ZCCM Investment Holdings, which has a 20% stake in the country’s biggest mines, wants to liquidate KCM, claiming that Vedanta is lying about expansion plans and is paying too little taxes.
However, Chinese companies are reluctant to buy disputed assets. ZCCM-IH’s claims have to go through arbitration. This is an important test and could open the way for a sale. The companies also face some anti-Chinese sentiment on the ground among trade unionists and local communities.