Introduction

Copper is central to the Zambian economy, with the country ranking as the world’s 10th-largest producer. In 2023, copper accounted for approximately 60% of export revenues and an estimated 15% of GDP. Government revenues from mining, dominated by copper, contributed 10.7% of total government revenue in 2023, while the sector provided 2.3% of national jobs. Despite these contributions, heavy reliance on upstream mining exposes Zambia to risks such as slow growth, limited diversification, and vulnerability to external shocks. Deeper participation in the value chain through processing and manufacturing offers a pathway to economic transformation, though success requires careful sequencing and the resolution of binding constraints.

What is value addition?

Value addition is defined as the difference between the value of output and the intermediate inputs used in production. In the mineral context, it involves moving downstream from extraction to processing, refining, and manufacturing. However, downstream processing does not automatically result in higher domestic value added, as many activities are capital-intensive and rely on imported technology or inputs. A multi-dimensional approach to value addition is required, encompassing social dimensions, such as quality employment and skills development, and environmental dimensions, including decarbonising energy use and improving resource efficiency.

Mapping the copper value chain

Zambia mined approximately 800,000 tonnes of copper in 2023, representing 3% of global output. The country aims to triple this production to 3 million tonnes by 2031. Zambia currently possesses substantial midstream beneficiation capacity, with 99.9% of its copper smelted and refined in-country. Specifically, 76.2% of copper is converted into anodes and blister copper, while 22% is refined into high-purity cathodes. However, only about 1% of this copper is absorbed by domestic manufacturing, primarily for products such as insulated electrical wiring and copper cables. A significant portion of physical exports are destined for China, which accounted for 58% of copper exports by value in 2023.

Key opportunities for increased copper value addition in Zambia

Research suggests that expanding midstream processing, specifically smelting and refining, offers the most immediate and scalable near-term opportunities. The International Trade Centre (ITC) estimates that Zambia could increase annual exports of unrefined copper anodes by USD 2.4 billion and refined cathodes by USD 1.3 billion by 2030 under favourable conditions. In contrast, downstream manufacturing opportunities, such as low-voltage electrical conductors (USD 34 million potential) and refined copper wire (USD 19 million potential), are currently more modest in scale. Policy should therefore focus on consolidating midstream processing while building the foundations for more advanced manufacturing, particularly for products linked to regional infrastructure and electrification demand.

Challenges for further copper value addition in Zambia

Electricity is identified as the critical binding constraint. The mining sector consumes approximately 50% of available electricity, and supply is insufficient to meet current demand or support rapid expansion. Finance is another major hurdle; while the banking sector is profitable, high borrowing costs and collateral requirements hinder small and medium-sized enterprises. Trade logistics also reduce competitiveness, with transport costs for refined cathodes estimated at USD 180–200 per tonne, eroding margins. Other factors hampering industrial development include limited access to competitively priced feedstock, skill shortages in technical fields like process engineering, and intense international competition from dominant refiners like China, which produces 44% of global refinery output.

Assessment of Zambia’s policies for copper value addition

Zambia has adopted several policies, including the National Mineral Resources Development Policy (2022–2027) and the Minerals Regulation Commission Act 2024, to promote beneficiation. Flagship tools like Multi-Facility Economic Zones (MFEZs) seek to cluster copper-based industries close to mining operations. However, policy effectiveness is often weakened by implementation gaps and a lack of coordination across institutions. For example, the Integrated Resource Plan projects copper output reaching 3 million tonnes by 2040, which contradicts the government’s target of 2031. Trade policies have used export taxes of 10%–15% on unprocessed ores to incentivise local processing, but fiscal disincentives alone have had limited traction without addressing underlying commercial viability and power supply issues.

Conclusion and recommendations

The report recommends that the Government of Zambia adopt a sequenced, multi-pronged approach. Immediate priority must be given to ensuring access to reliable and affordable electricity through accelerated investment and tariff reform. Authorities should clear implementation roadmaps that link industrial ambitions to energy, skills, and logistics infrastructure. To foster competitiveness, Zambia should strengthen regional market integration through the AfCFTA and SADC, targeting demand for copper-intensive products in neighbouring countries. International partners should focus support on strengthening copper processing competitiveness, de-risking private investment through blended finance, and investing in regional trade corridors like the Lobito Corridor. Finally, environmental and social risks must be managed as a core component of the value-addition strategy to ensure long-term sustainability.