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26 May 2023

Elijah Mumba, News Diggers (Zambia)

Zambia: Strong policy framework, enhanced mineral governance, increased transparency & enforceable accountability mechanisms needed for maximum benefit from transition minerals; opinion

The energy transition: what does it mean for Zambia’s mining sector? 22 May 2023

…The country’s diverse range of mineral resources, including critical minerals for the energy transition, coupled with the projected surge in commodity prices, create a unique opportunity for Zambia to enhance its revenue, stimulate economic growth, and generate job opportunities. Mining has long been a vital and integral driver of Zambia’s economic development. Statistics from the Ministry of Finance and National Planning reveal that the mining sector accounts for 17.5 percent of the country’s Gross Domestic Product (GDP) and over 70 percent of its foreign exchange earnings. While the primary focus of mining in Zambia has traditionally been on copper and cobalt, the country possesses a diverse range of mineral resources. The Ministry of Mines and Mineral Development has identified various minerals including manganese, lithium and nickel.

…What does the term “energy transition” mean and how does Zambia stand to benefit from it? The concept of energy transition entails a significant shift away from the utilization of fossil fuels such as coal, natural gas, and oil, towards the adoption of renewable energy sources like wind and solar power. This transformative process holds promising prospects for Zambia. According to the Extractive Industries Transparency Initiative (EITI), the energy transition is projected to fuel an escalated demand for specific minerals, including cobalt, graphite, lithium, and nickel, among others. These minerals, commonly referred to as transition minerals, play a vital role in facilitating the transition from fossil fuels to low-carbon energy sources and sustainable transportation. Transition minerals are also called “green minerals”, “energy transition minerals”, “strategic minerals” or “critical minerals”.

…Zambia’s mining sector has immense potential to leverage the forthcoming commodity price boom and energy transition. However, to maximize benefits, the country needs a strong policy framework, enhanced mineral governance, supportive infrastructure, and increased transparency and enforceable accountability mechanisms within the sector. Meeting these prerequisites is vital for attracting investments, optimizing mineral production and ensuring a reliable supply thereby fully capitalizing on the anticipated surge in commodity prices. The energy transition also presents significant opportunities for Zambia, particularly in terms of value addition and local content development.