India to send industry delegation for copper mining opportunities in Zambia

The Mines Ministry has proposed sending an Indian industry delegation to copper-rich Zambia to discuss potential copper exploration and mining projects in the southern African country. Mining companies including Vedanta and its subsidiary Hindustan Zinc, along with electric vehicle (EV) maker Ola Electric and lithium-ion battery recycler LOHUM, have expressed interest in joining the delegation to Zambia to attend a joint working group (JWG) meeting to discuss cooperation in the field of mineral resources.

Zambia has about 6 per cent of the world’s copper reserves and was the eighth-largest producer of copper in 2022. Copper is widely used in sectors like construction, consumer durables, transportation, and industrial manufacturing. It is also used in clean energy technologies including solar panels, EVs, and energy efficient motors. China Nonferrous Mining Corporation (CNMC) is among the largest producers of copper in Zambia.

In a stakeholder meeting held on October 18, 2023, VL Kantha Rao, Secretary, Ministry of Mines, stated that the second meeting of JWG, which was set up under an memorandum of understandings (MoUs) signed by the Ministry of Mines, India and the Ministry of Mines and Mineral Development, Zambia, is set to take place in Zambia. He added that the ministry wants to send a combined business delegation to Zambia, with participation from both private and public sectors, for an effective outcome of the collaboration between the two countries, according to minutes of the meetings accessed by The Indian Express under the Right to Information Act (RTI).

The first JWG meeting under the MoU, which was signed in August, 2019 for a period of five years, was held through video conferencing on September 23, 2020. The mines ministry did not respond to a query on when the second JWG meeting is scheduled to take place.

On December 26, 2023, Kantha Rao met with Ashok Kumar, High Commissioner of India to Zambia, to explore possibilities of expanding bilateral cooperation with Zambia in the mining sector, according to a report available on the mines ministry’s website.

During the stakeholder meeting in October, Khanij Bidesh India (KABIL), a central public sector enterprise (CPSE) under the mines ministry tasked with the acquisition and development of critical mineral projects overseas, also proposed to set up a video conferencing meeting with the Zambian side to discuss opportunities based on interest shown by industry stakeholders. Both the mines ministry and KABIL did not respond to a query on whether industry stakeholders have submitted proposals following the meeting in October. KABIL also did not confirm whether a meeting with the Zambian side has been arranged until now.

As per the minutes, KABIL also revealed that it has no engagement with Zambia currently, however, it is interested in exploring opportunities given the good potential of copper mining in the country. On Monday, KABIL had announced the signing of an agreement with a state-owned company in Argentina to explore and develop five lithium blocks in the South American country.

As per International Copper Association India, domestic copper demand grew by 16 per cent in FY2022-2023 (FY23), while demand for copper in clean energy technologies grew by 32 per cent. At the same time, net imports of copper cathode, which is the basic product of copper production, grew by 180 per cent in the same financial year as India is not self-sufficient in copper due to low domestic reserves. The current scenario of increasing demand for copper coupled with limited domestic supply makes the acquisition of copper mining blocks overseas an attractive proposition for Indian mining companies.

Currently, India has a limited presence in Zambia’s copper mining sector. In September last year, Vedanta regained control of Konkola Copper Mines (KCM) after it was seized by Zambian authorities in 2019. The Zambian government owns a 20 per cent stake in KCM. In 2023, Vedanta also pledged to invest over $1.2 billion in Zambia to increase output of mined copper and pay outstanding debt. KCM holds about 250 million tonne of copper ore reserves. According to the meeting minutes, Kantha Rao advised Vedanta “to share with the industry the logistics and other information required for doing business in Zambia as they have good experience”.

India is not alone in investing in Zambia for its copper reserves. Canada-based First Quantum Minerals and China’s CNMC are among the largest producers of copper in Zambia. In December, Sokwani Chilembo, chief executive officer of Zambia Chamber of Mines, had revealed that CNMC plans investments worth $1.3 billion in developing its existing mines to increase output.

Among the interested companies to explore mining opportunities in Zambia is Vedanta-owned Hindustan Zinc, in which the Indian government also owns a 35 per cent stake. Vedanta did not respond to a query on whether it plans to acquire more copper blocks in Zambia. Ola Electric, a major maker of electric two-wheelers, also did not elaborate on its interest in copper mining in Zambia.

LOHUM, a Noida-based leading recycler of lithium-ion batteries in India, clarified that it is not interested in acquiring or exploring copper mining blocks in Zambia.

“LOHUM is racing to fulfil the demand for copper exclusively through recycling and by making recycled copper more competitive, sustainable, and of higher quality than its mined origins,” said Rajat Verma, its founder and CEO. Verma did not clarify the purpose of LOHUM’s proposed inclusion in the industry delegation for the second JWG meeting between India and Zambia.

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