Corporate and finance expert Augustine Hamwela believes Zambia has a very bright future. He spoke to Craig Sisterson about the roles mining businesses and government play in ensuring this comes to fruition.
To realise the potential and help unlock the future of mining in Africa, businesses need to make sure their own houses are in order in terms of compliance, while governments need to work on streamlining and alleviating the regulatory bottlenecks, says Augustine Hamwela.
“One of the things we say to a lot of our clients is that compliance is a huge, huge advantage,” noted Hamwela, co-founder of innovative, modern law firm August Hill & Associates which serves a variety of Zambian and international businesses and investors from its Lusaka base. “We encourage them to do a complete compliance health check, and we’re doing quite a lot of that work to make sure they are ready to take off when the opportunities come their way.”
Issues such as haphazard record-keeping, unaudited financials, or not keeping mining and related licences and policies (e.g. mineral processing licences, environmental law type approvals etc.) in good order and in sync makes for lengthier due diligences and tougher conversations with financiers, Hamwela explained.
Meanwhile, Hamwela highlighted that new opportunities across Africa are there for those who are prepared, and while Zambia has been a mining country since colonial times, it has wider future potential.
“We have massive copper and cobalt reserves in Zambia, and a reputation as a peaceful country, so generally there’s a sense that your investments are safe,” he said. “With our new government, there’s a lot of opportunity in terms of investment, and in the past 18 to 24 months we’ve seen a number of new projects come through. Another big opportunity is gold; in the last four or five years, sizeable gold deposits have been found. The gemstone industry also has massive opportunities around processing, cutting and cleaning rather than just raw exports.”
There is already a lot of positive news for Zambia for 2023. This year Canadian company First Quantum Minerals is investing $500 million to construct solar and wind energy installations to power its copper mines in Zambia. Anglo American has returned to Zambia for the first time in 20 years via a joint venture for copper-cobalt (key battery minerals) exploration licences, and Rio Tinto is involved in joint ventures in Copperbelt Province.
With the theme of the upcoming Mining Indaba 2023 being “Unlock the Future of African Mining”, Hamwela believes governments also need to play their part by untangling regulatory and tax regimes and improving infrastructure so their communities can benefit more from the mineral riches being discovered and exploited.
“In Zambia there’s quite a bit of work that needs to be done with the Ministry of Mines to improve efficiency as well as transparency, from simple matters like searchability of mining licences to how long it takes for applications to move,” commented Hamwela. “There are bottlenecks which can sometimes affect a transaction if you’re trying to transfer mining rights or if clients want to acquire a mining right or are looking for financing in the sector.”
Local procurement of goods and services, and ensuring true benefits trickle down to local communities is also an ongoing challenge in Zambia and across Africa, says Hamwela. “I think there needs to be a deliberate policy to ensure that locals benefit from the dividends of mining.”
Mining Indaba will be held in Cape Town from 6 to 9 February. To register click here.
