With so many urgent challenges in Africa, it is easy to understand why the international community has failed to give Zambia much attention. The lack of interest is a mistake. Especially now. Zambia’s status as one of the most prolific cobalt and copper producers should interest anyone committed to a transition to clean energy.
These minerals are essential for the growth of the green revolution. Cobalt provides storage capacity for renewable energy, power grid stabilisation and electric vehicles. Copper’s ability to conduct electricity remains unmatched. Copper is needed for more or less anything that has an on-off switch – whether it be in technology, health or infrastructure. An electric vehicle requires around four times more copper than a conventional car. As governments and businesses look to drastically cut carbon emissions and invest in green technology, already strong demand for both minerals is only set to rise.
Zambia should take full advantage of its natural resources. To do so, it needs to create the right conditions for the whole of the mineral producing spectrum, including a competitive energy sector to provide power to the mines in Zambia as well as the right legal, environmental and financial conditions to encourage the growth, efficiency and sustainability of the local mining sector.
There have been multiple attempts to liberalise and privatise the Zambian energy sector. The EU, concerned that the sector is too dependent on oil imports and favourable weather conditions, has invested heavily in the Zambian Energy Efficiency and Sustainable Transformation programme (ZE₂ST). Zambia was the first country to join the IFC Scaling Solar Programme in 2016. It is also working with the German Development Bank to implement the Global Energy Feed-IN Tariff (GETFiT) programme to procure additional solar photovoltaic (PV) capacity. Power China recently signed a USD548 million deal with the state power utility, ZESCO, to jointly install 600 MW of grid-connected solar parks.
Despite the promises in the new policies, the energy market seems to be hampered by the position of ZESCO. It remains unclear whether it will cede control for other producers to not only generate power but to sell it onwards. ZESCO’s dispute with Copperbelt Energy Corporation, who is the principal supplier of power to the most productive mines in Copperbelt Province, is not an encouraging sign.
Troubles abound in the mining sector which has been hit hard by a lethal combination of disease, corruption and abuse of power. The biggest mines are being hit repeatedly by government intimidation, confiscation and non-payments. Foreign-owned mines are being mishandled, egged on by a growing trend of resource nationalism. Large scale copper and cobalt investment and production will eventually ground to a halt if the regulatory and fiscal environment does not shift. With copper the country’s largest revenue source, this makes no sense at all. This government cannot see the wood for the trees.
This is a missed opportunity. Zambia can directly profit from a reliable, responsible and open mining and energy sector. It also has under-utilised transmission lines that can power up neighbouring countries. It can develop its own technologies to become a major player in the renewables and transportation fields. Just last week, Uganda launched its first electric bus plant using its own resources. With global supply chains so disrupted, it makes sense for the production of renewables and electric vehicles to move closer to its sources.
The World Bank has said that more than three billion tonnes of minerals will be required by 2050 to deploy sufficient wind, solar and geothermal power, as well as energy storage, to reduce global warming and meet the demand for clean energy technologies. It has also warned against over-reliance on single-origin producers for these minerals. With the mineral producing Latin America battered by the pandemic, the focus should shift to opportunities in Africa, and in particular in Zambia.
At the moment, any interest from the international community centres on Zambia’s debt and US-China tensions. China holds at least a third of Zambia’s debt, if not more. It is heavily invested in all of Zambia’s industries. The international community is worried about servicing this debt and entrenching Chinese ties even further in Zambia. Even the IMF refused its appeal for emergency assistance. But without help, Zambia will default – and the world will lose another source of minerals and metals so essential for the green revolution.
The world cannot move away from its reliance on fossil fuels without renewables – and it needs copper and cobalt to power that transition. To make that happen, the international community needs to get interested in Zambia again.
By Simon Wolfe, International Lawyer and MD of Marlow Strategy