Zambia's 2023 Mines and Minerals Development Act amendment is the single most important African mining legislative development in five years. The revision reversed the 2019 royalty regime - widely considered the proximate cause of First Quantum's investment freeze and Glencore's Mopani care-and-maintenance decision - and has triggered an immediate, visible response from institutional mining capital.
What the 2023 Reform Changed
Base metal royalties reduced from 8% (open pit) and 6% (underground) to 5.5% across all methods. The variable royalty tied to metal prices has been replaced with a fixed rate, providing the investment certainty that was absent under the 2019 regime. Stability agreements - which provide 10-year fiscal certainty - are available again for qualifying investments above $500M.
First Quantum's Kansanshi S3 Expansion - The Signal
First Quantum's approval of the Kansanshi S3 expansion - a $1.4B investment to extend mine life and increase copper output - is the clearest institutional signal that the post-reform investment environment is credible. Glencore has similarly signalled a return to Mopani following the fiscal reform.
Key Takeaways
- Base metal royalties reduced to 5.5% - most competitive rate since pre-2019
- Stability agreements reinstated for investments over $500M
- First Quantum's $1.4B Kansanshi S3 expansion confirms post-reform credibility
- Emerald sector benefits from separate gemstone royalty - currently 6%
- Hasnihl tracks available Copperbelt assets and advises on entry structure