The office’s work has been disrupted since closure in February with the mines ministry saying the previous granting of licenses had been tainted by corruption. The office reopened on October 19 and will start accepting new license applications from November 21.
“The clean-up is very good news for Zambia,” Nick von Schirnding, executive chairman of Anglo American’s prospective JV partner Arc Minerals, tells The Africa Report. “Corruption corrodes the whole system and will destroy value. Zambia is in the process of cleaning up its act.”
READ MORE Zambia: In his first year Hichilema stabilised the kwacha, but corrupt officials remain untroubled
Arc Minerals and Anglo American in May agreed a JV to develop Arc’s copper-cobalt project in Zambia’s North-Western province.
Anglo American has the right to a 70% stake in the JV in return for an investment of up to $88.5m, including cash of up to $14.5m. Concluding the agreement has been held up by the fact that the licenses involved have to be revalidated by the mining cadastre office.
The companies at the start of November extended their exclusivity agreement for three months until February. “I am confident we will get there,” Von Schirnding says. He aims to conclude the agreement in the next one to two months, before the summer holidays starting in mid December. “We need to get things done.”
The project would be Anglo American’s first new investment in Zambia since it pulled out of the country in 2002. Von Schirnding was the company’s head of investor and corporate affairs at the time. The licenses in Zambia’s North Western province are located in the Domes region, near mines such as First Quantum Minerals’ Sentinel and Kansanshi, and Barrick’s Lumwana mine. The areas were previously explored by Anglo American during the late 1990s.
- The zone constitutes “one of the most prospective copper exploration areas in the world,” Von Schirnding says.
- Some of the area’s dirt roads need to be upgraded, and the power source to be used at the project is yet to be defined, though the national grid is a possibility, he adds.
Ambitions to Scale
Zambia is Africa’s second-largest copper producer and aims to more than triple annual output in the next ten years. Von Schirnding is confident that Hakainde Hichilema, elected president in 2021, is making the country more business friendly. Running a country is “like steering a supertanker” and changes need time to take effect, he says. But the closure of the mining cadastre office shows that Hichilema “means what he says. So far so good.”
Arc Minerals is listed on London’s Alternative Investment Market (AIM). Von Schirnding wants to scale Arc up from being a junior miner and turn it into a mid-sized producer. He wants to secure more licenses in Zambia and Namibia to look for copper, and maybe also for nickel and zinc. The priority will be projects which can be brought into near-term production and so produce cashflow, he says.
- The company has two prospecting licences in Botswana’s Kalahari Copper Belt, and started drilling at the Virgo project in August.
A mining cadastre office perceived as being free of corruption would be a big step forward for Hichilema’s Zambia.
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