Zambia State Firm Forms Gold Venture to Diversify Mining Sector
0h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
zambiagold-mining
Fazen Markets Editorial Desk
Collective editorial team · methodology
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ZCCM Investments Holdings, the Zambian state-owned mining investment arm, formed a new joint venture dedicated to gold mining on 18 May 2026. The initiative is a core component of the government's strategy to diversify the nation's mining sector away from its historical dependence on copper. Zambia is Africa's second-largest copper producer, with the red metal dominating its export revenue.
Zambia's economy has long been vulnerable to swings in the global copper price. The last major downturn in 2022-2023, when copper fell from over $10,000 per tonne to near $7,500, exacerbated the nation's debt distress and contributed to a protracted default. This event highlighted the urgent need for economic diversification.
The current macro backdrop features copper prices trading near $9,800 per tonne, supported by supply concerns and energy transition demand. However, this relative strength has not fully alleviated fiscal pressures. The government's drive to finalize a restructuring of its $13.4 billion external debt has accelerated efforts to build more resilient revenue streams.
The catalyst for this specific venture is the completion of a nationwide geological survey that identified several high-potential gold-bearing greenstone belts outside the traditional Copperbelt province. This data provided the technical justification for ZCCM-IH to strategically allocate capital beyond its core copper assets.
Copper accounted for 73.4% of Zambia's total export value of $11.2 billion in 2025, according to Bank of Zambia data. Gold's contribution was negligible, at less than 0.5% of total mineral exports. The government's official target is to increase gold production to over 40,000 kilograms annually within the next decade, a figure that would establish a meaningful secondary revenue source.
ZCCM-IH's existing portfolio is heavily concentrated in copper. The company holds minority stakes in major operations like Kansanshi Mining Plc and Mopani Copper Mines. The new joint venture represents a direct investment into a different commodity class. The initial capital commitment for the gold venture has not been disclosed, but it follows a pattern of strategic investments.
| Metric | Before Venture (2025) | Target (5-Year Outlook) |
|---|---|---|
| Gold's Share of Mineral Exports | <0.5% | ~10-15% |
| Primary Mineral Export Revenue Source | Copper (73.4%) | Copper & Gold |
This diversification effort contrasts with regional peers. Tanzania, for example, generated $2.97 billion from gold exports in 2024, making it a top African producer. Ghana's gold exports exceeded $7 billion in the same period.
The primary second-order effect is a potential re-rating of Zambian sovereign credit risk. A successful diversification into gold could reduce the correlation between government revenue and copper prices, a key concern for bondholders. This may narrow the yield spread on Zambia's international bonds, which currently trade at a significant premium to peers.
Within the equity space, ZCCM-IH shares listed on the Lusaka Securities Exchange (LSEL:ZCCM) could see increased investor interest as the company transforms into a more diversified mining holding entity. The venture could also attract junior mining explorers to Zambia, boosting activity for local service and logistics companies. A major risk is execution; greenfield mining projects in Africa often face delays related to infrastructure, permitting, and community relations. The venture's success hinges on transparently selecting a competent international operating partner.
Market positioning shows early interest from long-only emerging market funds focused on natural resources. These funds are likely accumulating ZCCM-IH shares on the thesis that diversification will de-risk the investment case. Flow data indicates mild selling pressure from more conservative local investors skeptical of the strategic shift away from the known copper business.
The selection of an international operating partner for the joint venture is the immediate catalyst, expected by Q3 2026. The technical and financial credibility of the chosen partner will be a critical signal of the project's viability. Subsequent milestones include the publication of a maiden resource estimate for the targeted gold belts, due by year-end 2026.
Investors should monitor Zambia's sovereign credit rating reviews from Moody's and Fitch, with the next scheduled update in November 2026. A positive outlook change would be a direct endorsement of the diversification policy. Support for Zambian Eurobonds, such as the 2027 issue, is at a yield of 9.8%; a sustained break below 9.5% would signal improving market confidence.
Key resistance for the Lusaka Stock Exchange All-Share Index is at the 8,500 point level. A breakout above this technical level, driven by renewed foreign inflows into ZCCM-IH and other mining counters, would confirm a bullish domestic equity narrative.
Zambia's gold potential is largely unexplored compared to established giants like Ghana and Tanzania. The latter two nations have well-defined geological structures and decades of intensive mining activity. Zambia's gold is believed to exist in similar greenstone belts, but the exploration maturity is low. Success depends on replicating the exploration models that worked in West and East Africa, but this is a multi-year, capital-intensive process with no guarantee of similar results.
In the immediate term, this development has a neutral to slightly bearish impact on the copper market. It signals that one of the world's major copper producers is actively seeking to reduce its economic reliance on the metal. While not affecting physical supply in the short term, it could, over the long term, make Zambian copper production slightly less sensitive to price crashes, potentially altering supply dynamics. The focus for copper investors remains on production forecasts from existing ZCCM-IH-linked mines.
Yes, the diversification strategy extends beyond gold. The government has identified manganese, cobalt, and emeralds as strategic non-copper minerals. Zambia already possesses significant emerald deposits, and there are plans to formalize and scale up that sector. Cobalt, often mined as a by-product of copper, is another focus, with aims to increase local beneficiation rather than exporting raw cobalt concentrates.
Zambia's gold venture is a strategic, necessary step to mitigate sovereign risk from copper price volatility.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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