TI-Z has noted and followed with keen interest the discourse pertaining to the royalty conversion agreement which was signed and approved by the ZCCM-IH majority of shareholders in March 2023. Information disclosed by ZCCM-IH in 2022 intimated that upon the signing and entering into this agreement, the investment holdings would forgo dividend payments in preference for a revenue royalty model of 3.1% for the Kansanshi Copper mining project.
This deal was touted by ZCCM-IH as a better deal for the investment holdings and the Zambian people at large, though recent information that has emanated has cast a ‘shadow’ on this supposed ‘good deal’. TI-Z therefore calls for, and backs calls for the full disclosure of the signed and approved royalty conversion agreement in the interest of transparency. In doing so, TI-Z implores and reminds the ZCCM-IH management and the Board- as a state-owned mining investment company- to be forthcoming with information pertaining to the agreement, as ZCCM-IH is ultimately accountable to the people of Zambia. Ergo, the Zambian people should be able to know and discern for themselves the benefits that will be accrued through the royalty agreement.
Moreover, TI-Z calls into mind that Zambia, being a country that has agreed to and is an implementing country of the Extractive Industry Transparency Initiative (EITI)- an initiative that is working to enhance transparency in extractives along the value chain- provides for the disclosure of information relating to extractives (mining). In fact,
Standard, by which all implementing countries must adhere, requires that implementing countries such as Zambia, disclose any contracts entered into or amended since 2021.
Given the provisions for contracts and agreement disclosure in the mining sector, TI-Z urges ZCCM-IH to publish the signed agreement. Certainly, disclosure of the agreement will help dispel suspicions that emanated from the announcement of the agreement, and more recently, from discussions in the media.
Arguably, the public has been duped in the past with poorly negotiated agreements and contracts which were touted as beneficial for the Zambian people. It is our position, as TI-Z, that nothing is stopping the government and ZCCM-IH from making this agreement public, thereby promoting good governance values of transparency and accountability. By doing so, this will set a good precedence for subsequent contracts and agreements that will be entered into by the state in the extractives sector.
the EITI
Sampa J. Kalungu (Mr.)
CHAPTER PRESIDENT
