The Mines and Minerals Development (Local Content) Regulations, 2020

Mining is Zambia’s dominant industry and main stay of the economy. It accounts for 10 percent of the Gross Domestic Product (GDP), over 70 percent of foreign exchange earnings, 30 percent of Government revenue, and 8 percent of formal employment. Its annual procurement value chain has variously been estimated at between USD 3-5 billion. While mining has been critically important to the national economy, it has largely underperformed with regard to national development objectives of industrialization, economic diversification and job creation.

Over the past two decades, the sector’s commodity prices have consistently been high with copper peaking at USD 9,728 per tonne in 2011. The high commodity prices attracted increased Foreign Direct Investment (FDI) flows into the mining sector and ramping up of production to over 800,000 tonnes in 2011. While this has created high economic growth rates, it has not translated into structural economic transformation, more formal employment opportunities and improved welfare gains.

The above situation has led to several contestations from multiple business groups (i.e. Association of Mine Suppliers and Contractors, Chambers of Commerce and Industry, Zambia Association of Manufacturers, etc.) for the increased uptake of the local goods and services by the mining industry. Multilateral agencies (African Development Bank, United Nations Economic Commission for Africa, International Labour Organisation, and United Nations Industrial Development Organisation etc.) have also advocated for the establishment of production linkages to resource extraction through the enactment of local content measures

The expectation is that enabling domestic small- and medium-sized enterprises (SMEs) access to the large mining procurement value chain will create employment, develop technical capacities, encourage technology transfer, and ultimately lead to industrialization and economic diversification.