In our previous Monday Opinion, we delved into the potential of Zambia’s mining sector, with a specific focus on the viability of manganese and gold mining to drive economic growth and job creation. We highlighted how these two minerals hold the key to transforming the Zambian economy, especially in the context of renewable technologies and the growing demand for sustainable resources. In today’s opinion piece, we explore strategic recommendations drawn from the Centre for Trade Policy and Development (CTPD)’s research on Gold and Manganese mining that we believe can unlock the potential of these valuable resources in Zambia.
1. Strengthen Geological Mapping and Exploration Efforts: To assess reserves’ quality and quantity and facilitate informed decision-making, we the government should prioritize increased investment and funding for geological mapping and exploration in gold and manganese-rich areas. This could be achieved by allocating 10 percent of mineral royalty proceeds to the Geological Survey Department (GSD) through the Ministry of Mines and Minerals Development (MMMD) to ensure sustained financing. This funding would support efficient and responsible resource management by enabling prospecting and exploration activities. Emulating Australia’s successful model, where similar initiatives led to substantial gold discoveries, economic growth, and foreign investments in mining, would guide Zambia toward optimal resource utilization.
2. Establishment of Mineral Processing Facilities: Government should prioritize investing in mineral processing facilities such as washing and smelting plants, to enhance value addition and stimulate domestic industrial growth in the gold and manganese sub-sectors. Zambia could learn from Canada’s successful model, where strategic investments in mineral processing facilities have led to significant economic benefits. For example, Canada has boosted its export earnings and created a robust industrial ecosystem around its mining resources by processing raw materials domestically. Following Canada’s lead, Zambia can establish similar facilities to unlock new revenue streams and strengthen the mining sector’s contribution to the national economy.
3. Creation of Gold Market Hubs: Government should emulate Tanzania’s gold market reforms by establishing open trade centres in mining areas to facilitate the buying of gold by ZCCM-IH. To achieve this, the MMMD should develop a trading mechanism with standardized pricing based on grade, particle size, and value addition. Broadened market access for miners will enhance transparency, efficiency, and ultimately boost gold exports, leading to increased government revenues, as observed in Tanzania.
4. Support for Downstream Manufacturing Plants: Government should promote downstream manufacturing plants using minerals like manganese as feedstock, drawing insights from China’s successful development of the battery manufacturing industry. Incentivizing investments in steel and battery manufacturing led to remarkable economic growth, technological advancement, and skilled workforce in China. Emulating this approach, Zambia can foster a robust industrial ecosystem around its mining resources, transforming mining areas such as Serenje, Mansa, and Mkushi into thriving industrial hubs. These initiatives will uplift livelihoods, reduce poverty, and drive economic growth through increased foreign exchange, export earnings, employment opportunities, and domestic revenue generation via taxation.
5. Collaboration with Artisanal and Small-Scale Mining (ASM) Operators: Government should actively engage in partnerships with local and foreign investors to support Artisanal and Small-scale Mining (ASM) operators through Production Sharing Agreements (PSAs). These agreements will provide essential technical and financial assistance to the miners. The government, local and foreign investors should be compensated based on the actual value of production, reflecting their contributions. Additionally, equipment owners should be encouraged to collaborate with ASM operators through equipment lease agreements paid in actual production or cash. These partnerships are crucial to address the equipment challenges in mining areas and promote the productivity and sustainability of gold and manganese mining operations.
Conclusively, the strategic recommendations delineated above harbour substantial potential for optimizing Zambia’s mineral wealth, spurring robust economic growth, facilitating significant job creation, and enhancing the welfare of the citizens. While not exhaustive, implementing these recommendations could significantly boost the productivity of the manganese and gold sub-sectors. Taking prompt action is crucial for achieving prosperous outcomes for our nation. We urge the government and several other stakeholders to also consider the findings from extensive studies on gold and manganese mining available on CTPD’s website. With this, our opinion on “Leveraging Manganese and Gold Mining for Zambia’s Economic Growth and Job Creation” draws to a close.
About the Authors
Isaac Mwaipopo Heads the Centre for Trade Policy and Development in Zambia, providing guidance on trade policies, public finance, extractives, climate action and legislative reviews. His extensive experience ensures the organization remains a key resource for developments in these areas.
Elijah Mumba is a policy researcher and development economist who currently leads the Extractives Desk at the Centre for Trade Policy and Development. He holds a Bachelor of Arts degree in Economics with Mathematics from the University of Zambia and a master’s degree in Development Economics from the University of Cape Town.