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Copper accounts for about 70% of Zambia’s export earnings.
The government of Zambia has sold 15.9 million shares of its Zambia Consolidated Copper Mines-Investment Holdings (ZCCM-IH) to the national pension fund for almost $80 million.
The deal, signed Tuesday, is the first step in the government’s planned reduction of its stake in the company from 87.5% to 60% and aims to help reduce the nation’s growing budget deficit, Africa Intelligence reported (subs. required).
The move follows a recent decision to drop mineral royalties for underground mines from a recently revised 9% to 6%, while keeping opencast mining taxes at 9%.
The announced changes will be effective on July 1, once parliament has approved them.
Zambia, Africa’s second biggest copper producer with output of 730,000 tonnes last year, expects the sale of ZCCM-IH shares to mitigate a fiscal gap forecast last month by the International Monetary Fund.
Copper was last trading at $2.75 a pound in New York, down about 11% over the past year. The red metal accounts for about 70% of Zambia’s export earnings.
