Mining sector: Engine for economic development
Published On September 13, 2023 » 499 Views» By Times Reporter » Business, Columns
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THERE has always been a belief that the mining sector can offer more in terms of contribution to the local economy that it is currently doing.
This is through stronger participation of local people in the mining value chain to get more economic benefits beyond jobs and tax revenues.
Drawing more local suppliers on stream will require improved capacity, enabling business and financial capacity to meet the high-quality product and service specifications.
It is not a secret that most local suppliers of goods and services to the mines fall short of quality specifications because of a number of reasons.
Among them are the limited value addition, the limited technical capacity, access to affordable financing to be able to produce competitive goods and services and the perceived foreign cartels.
In addition, experts blame lack of effective local content policies to international protocols that view local content laws as discriminatory.
Available data indicates that of the US$4 billion annual mining expenditure in Zambia, only less than 13 percent of that is procured from local enterprises.
But the Government and stakeholders in the mining value chain have been pushing for a local content law to boost the local participation in the mining value chain.
During the 2023 Zambia Association of Manufacturers (ZAM) Mining Local
Content Conference, Mines and Mineral Development Minister Paul
Kabuswe stated that a local law is in offing.
In a speech read for him by Ministry’s assistant director Canisius
Mwenya, MrKabuswesaid to uplift the livelihoods of the Zambian people, thenarrative needed to change by strengthening the backward-forwardlinkages of the sector with other key economic sectors.
These are sectors such asmanufacturing to achieve economic transformation and diversificationas we aim to increase exports of value-added goods.
As for ZAM vice-president FronscenHaloba, a strong mining localcontent policy is critical in growing the participation of local people inthe mining value chain.
As ZAM advocates for the preparedness of local actors to meet the demands of mining firms, Ms Haloba says there is need to bear in mind that the mining industry is highly specialised.
“We need to be cognisant about the specialised nature of goods andservices required in mining value chains, the inputs the industryrequires are often at the higher end of the technology spectrum,” MsHaloba says.
But she has a word for the mining industry.
MsHaloba says procuring from local suppliers and manufacturers will mean fewer logistical and import costs as it is cheaper to sourceinputs closer to operations.
Added to this is a significantly improved corporate image from communities surrounding operations.
During the Kitwe gathering, Trade Policy Training Centre in Africa (TRAPCA) lecturer TsotetsiMakong cautioned policymakers in Zambia and elsewhere to align their local content policies with international trade and investment protocols.
“I know governments in Africa are facing pressure from citizens especially in commodity countries to come up with local content policies that support local procurement of goods and services but there is need to be wary of the protocols governments sign,” he says.
To him, countries should ensure that the local content policies do not contradict international protocols.
MrMakong says there is also need to increase the country’s productive capacity that can substitute imports.
Indeed for local content to work, there is need to invest in the production of competitive goods and services to reclaim the position.
Prof Makong says there lies a need to take a scientific approach framing local policies to look at what could work and what could not work.
The other challenge is limited access to cheaperfinancing by local manufacturers and suppliers which is rendering thelocal ‘cohort’ uncompetitive.
“Imagine you find that for a particular company to supply the mines, they need to import the input to produce goods to supply the mine, ifthe cost of inputs is too high then the mine will prefer importingfinished products because locally produced would be too expensive,”Prof Makong says.
To be competitive, local manufacturers need to invest in research and development as well as in technical capacity.
To this end, the ZAM and the Copperbelt University (CBU) have signed a letter of intent to bridge the gap between the academia and the industry during the conference.
Speaking during the signing ceremony, acting CBU vice-chancellor, Paul Chisale said thepartnership holds the potential to transform not only the academiclandscape of CBU but also the industrial as well as economic future ofZambia.
“The partnerships between academia and industry have become essential in driving innovation, fostering economic growth, and addressing the challenges of our time,” Professor Chisale says.
He says in a speech read for him by CBU Africa Centre of Excellence
for Sustainable Mining leader MwansaChabala that the collaboration signifies the acknowledgment of the interdependence between academia and industry.
“It underscores the importance of research and education that is not just theoretical but practical, education that is closely aligned with the needs and challenges of the real world,” Prof Chisale says.
MsHaloba describes the intent to collaborate signing between ZAM and CBU as a momentous event that has added greater importance to the conference.
“As ZAM, we do recognise that enhancing local content in the mining sector needs concerted efforts from all stakeholders,” she says.
MsHaloba says CBU, through its Africa Centre of Excellence in Sustainable Mining, which is known for ground-breaking research in mining, stands as a right collaborator to increase local content.
Through the intent to collaborate, MsHaloba says ZAM hopes to work on more research which contributes to the local content.
Under the partnership, CBU will provide access to its vast academic resources, research facilities, and a pool of talented students and faculty members.
In return, ZAM will offer industry insights, real-world challenges,and opportunities for internships and research collaboration.
The exchange will bridge the gap between theory and practice, by ensuring that graduates are better prepared for the workforce.
Stakeholders should continue pushing for more interventions to expandthe participation of local suppliers of goods and services in the mineral value chain.

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