Loading…
Loading…
The Mines and Minerals Development (Amendment) Act, No. 29 of 2022, amends the parent Mines and Minerals Development Act, 2015 (MMDA 2015), specifically restructuring the Mineral Royalty Tax (MRT) on copper — Zambia's dominant mineral export.
Prior regime: A flat-rate copper royalty applied regardless of commodity prices, failing to capture resource rents in high-price environments and providing no relief to producers during low-price troughs.
New sliding scale structure (effective 1 January 2023):
| LME Copper Price (USD/tonne) | MRT Rate |
|---|---|
| < USD 4,000 | 4.0% of norm value |
| USD 4,000 – < USD 5,000 | 6.5% of norm value |
| USD 5,000 – < USD 7,000 | 8.5% of norm value |
| ≥ USD 7,000 | 10.0% of norm value |
The norm value is the monthly average LME cash price per tonne multiplied by the quantity of metal produced or recoverable under the licence. At LME copper prices prevailing from 2024 through 2026 (~USD 9,000–10,000/t), the effective rate for all copper operations is 10%.
Other mineral royalty rates codified by the Act:
The sliding scale is copper-specific; cobalt and other base metals retain fixed rates.
Norm-value architecture: The LME monthly average benchmark prevents transfer-pricing manipulation by producers. The monthly averaging smooths short-term price volatility for royalty calculation while tracking the commodity cycle over the course of the year.
Enacted under President Hakainde Hichilema's UPND government as part of a broader fiscal-adequacy drive following Zambia's 2020 Eurobond default and the 2022 IMF Extended Credit Facility arrangement. The sliding scale explicitly ties state royalty revenue to commodity cycles, providing downside protection for producers at 4% (when copper is economically marginal below USD 4,000/t) while maximising rent capture at high prices.
The 2022 Amendment Act was subsequently superseded at the institutional level by the Minerals Regulation Commission Act, No. 14 of 2024 (MRCA, filed 2024-12-20-zambia- minerals-regulation-commission-act), which fully repealed and replaced the MMDA 2015 as the framework for mining regulation. The royalty-rate provisions introduced by the 2022 Amendment are transitionally preserved within the MRCA implementing architecture until the new Minerals Regulation Commission issues fresh royalty regulations.
The Act is the fifth distinct fiscal or regulatory instrument in Zambia's 2022–2026 mining-sector modernisation suite alongside the National Critical Minerals Strategy 2024, the MRCA 2024, the Property Transfer Tax Amendment Act No. 27 of 2024, and the Geological and Minerals Development Act No. 2 of 2025.
10% MRT adds ~USD 950/t to the royalty burden on Zambian copper — material relative to all-in sustaining costs of ~USD 3,500–5,500/t for major operations (Kansanshi, Lumwana, Sentinel, Nkana, Konkola)
sliding RMC), Chile (0–14.5% via RMI, with multiple credits), and DRC (3.5% copper base royalty), but below the combined effective rate in some high-royalty jurisdictions; directly affects Zambia's capital-attraction competitiveness relative to DRC Copperbelt peers at Manono (lithium) and Kamoa-Kipushi (copper) and relative to Peru's Ancash and Junín copper belt
10% MRT generates USD 760M–950M/yr in royalty flow — a material contributor to Zambia's IMF fiscal-consolidation path and domestic resource-mobilisation targets
state-revenue stream from ZCCM-IH's 20% free-carry equity in Kansanshi, Sentinel, and other major mines, stacking royalty revenue on top of equity dividend flow
supersede the 2022 Act's four-band copper structure when the MRC formally takes over
interact with the sliding-scale norm-value architecture for Chinese-operated mines (First Quantum, CNMC/Nkana, Sino-Metals Leach, NFC Africa) paying in yuan
partially offsets the 10% MRT burden for producers unable to smelt domestically during the 2026 smelter maintenance rotation