Despite a challenging business environment in many sectors across the globe, Zambia’s wealth of natural resources continues to open the door for new investors and opportunities. As the world begins its recovery and gradual reopening in the face of the pandemic, traditional industries require energy, innovation and reinvention.
ZCCM Investments Holdings Plc. – the mining conglomerate whose major shareholder is the Government of the Republic of Zambia – is signalling its intention to take on a leadership role in Zambia’s recovery with its announcement this week that they are partnering with a new strategic mining play – Array Metals.
This company has an estimated inferred resource by JORC standards of 3 million tonnes of gold ore in Mumbwa, with 2.53.5grams per tonne totalling to about 7,500 kgs of gold – 400 million USD in today’s prices.
The two-year exploration study in Zambia’s Central Province entailed gold drilling of 59 holes at a depth of 150 metres, with plans to extend exploration activities to include 100 holes at a depth of 400 metres in the next five years.
The decision by ZCCM-IH to partner with Array Metals through Consolidated Gold Company (CGCZ) is a promising sign that investment in Zambia continues to move forward in the face of turbulent economic times.
This development is the result of several key long-term economic strategies coming to fruition.
First, though Zambia is famed for copper mining, a diversified economy creates resilience, inspires greater investor confidence and supports sustainable long-term growth. Though Array Metals has other new mining projects with 200 million tonnes of copper ore of 2% in Chick, Marie, Ruby, Muriri and Katwaro, in the same region, the additional focus on gold shows how Zambia’s government is working to diversify the country’s economic activities and create sustainable jobs through underexplored markets such as gold.
Furthermore, the gold mine is located under the traditional leadership Chiefdom of Chief Shakumbila in Mumbwa, Central Province. Though the mine had previously been closed for many years, the discovery of the resource through exploration has revived it. Array Metals estimates that the project will create 300 local jobs immediately, with more jobs added as mining begins in earnest.
Another key feature of the endeavour: ZCCM-IH’s partnership with Array Metals encourages mid-sized mining firms venturing into exploration and mining activities. Array Metals has urged the government to support a new generation of smaller companies to take advantage of the opportunities afforded by new discoveries.
In the past, it has been unclear whether medium-sized companies have the capacity to perform mining exploration and mining activities. This partnership is an example that shows that Zambia’s mining sector is ripe for new players and that the barrier to entry is not as high as investors once assumed.
In comparison with the giants that have dominated Zambia’s mining sector, medium-sized companies are nimbler and more innovative. Array Metals is no different, with a strong focus on flexibility and deployment of the most cutting-edge technologies to streamline exploration and production. The fresh competition will spur all companies in the sector to increase outputs and efficiency, driving greater investment and progress.
As a result, larger, more established companies will no longer command monopolies, and Zambia’s government will have more leverage to garner revenue and help all citizens reap the benefits of the assets under Zambian soil.
This development also shows that there is a conducive environment for investment in Zambia more broadly. Growing production of copper and gold in Zambia, creating jobs for Zambians, increasing the country’s GDP and introducing fresh competition in key sectors will add value in both the short and the long term.
The joint venture partnership between CGCZ with Array Metals is a powerful symbol to international investors, increasing confidence in Zambia’s mining sector and in the Zambian economy overall. In times of uncertainty, investors must weigh their decisions carefully. This partnership is a step forward that demonstrates to Zambians and to the world that ZCCM-IH is looking toward the future.