Government Gamble Could See Mopani Mines Lost To China

The PF government could be forced to hand over the recently acquired Mopani Mines to China in order to settle Zambia’s debts, according to an official at the Ministry of Finance. 

The ailing copper mine, which the government acquired from Glencore in January, is currently haemorrhaging money, and experts say it will require a further $300 million in capital investment just to break even.  

The government has also signed loan agreements with China totalling $9.9 billion, putting Zambia firmly in the pocket of the Asian superpower.

Now an unnamed official at the Ministry of Finance, who is familiar with operations at Mopani, says the government could be forced to hand over the copper mine as collateral on its enormous Chinese debts. 

“it’s possible the mine operation may be used as collateral if we don’t get an investment partner soon,” he said.

The government, through its investment firm ZCCM Investment Holdings, contracted $1.5 billion in debt in order to purchase the mine after the cost of copper collapsed last year. Mopani management say the mine will have to produce 140,000 metric tonnes of copper in order to become profitable again. 

Zambia has a poor track record of repaying its debts under the Patriotic Front. In November last year it became the first African nation to default on its obligations during the pandemic era. Not only could a further failure to repay debts see Zambia’s industry end up in foreign hands, it could also undermine any likelihood of a debt relief deal from the IMF.

Meanwhile, as the government sinks millions into a failing copper mine, people living close to Mopani are struggling to put food on the table. 

Angella Namakwa, who owns a fruit stall in Kitwe, says she can only afford a single meal of nshima for her family of four each day. 

“I can barely make ends meet because prices of almost everything keep going up,” she told the Wall Street Journal. 

“Our currency is becoming useless yet we have to keep paying bills, buying food and everything else.”