By Charles Pitts
LUSAKA, Zambia : ZCCM Investments Holdings Plc (ZCCM-IH), the state-backed investment vehicle for the Zambian mining sector, is aggressively restructuring its portfolio to favor royalty-based income over traditional dividends. Under the leadership of CEO Kakenenwa Muyangwa, the company is also moving to secure increased minority stakes in major copper operations, signaling a more assertive role for the state in the nation’s mineral wealth.
The strategic shift comes as Zambia targets a massive increase in annual copper production to 3 million tonnes by 2031. For ZCCM-IH, the move toward royalties: a percentage of gross revenue rather than a share of net profits: is intended to provide a more stable and predictable cash flow for the Zambian treasury, insulating the state from the operational and accounting complexities that often delay dividend payments.
Mining News: The Strategic Pivot to Royalties
For decades, ZCCM-IH functioned primarily as a minority equity holder, receiving dividends only after mine operators covered operating costs, debt service, and capital expenditures. This model often left the state with little to show during years of heavy reinvestment or low profitability.
The most prominent example of the new strategy is the 2023 agreement with First Quantum Minerals regarding the Kansanshi mine. Under this deal, ZCCM-IH converted its 20% equity stake into a 3.1% royalty on gross value of production. This ensures that the state receives payment as long as the mine is producing, regardless of the operator’s bottom-line performance.
“We are looking for more of these types of arrangements,” Muyangwa said in a recent briefing. “Our goal is to ensure that the Zambian people receive a fair and consistent share of the value generated by our natural resources. Royalties provide that certainty in a way that dividends simply cannot.”
The pivot is particularly relevant given the mining M&A deals expected in 2026, as global majors seek to consolidate assets in the Copperbelt to feed the growing demand for transition metals.
Targeting First Quantum and Vedanta
ZCCM-IH is not only changing how it gets paid but is also looking to increase its “influence” in the operations of major mines. Specifically, the company has expressed interest in boosting its minority stakes in assets operated by First Quantum Minerals and Vedanta Resources.
At the Konkola Copper Mines (KCM), currently being handed back to Vedanta after a years-long legal dispute, ZCCM-IH holds approximately 20.6% equity. Analysts suggest that ZCCM-IH may look to increase this stake to as much as 31% in some existing ventures to gain more say in commercial terms and supply chain participation.
However, Muyangwa has clarified that the company will not force operators into royalty structures or increased stakes. “It is a negotiation,” he noted. “We want to be partners of choice, ensuring that commercial terms are attractive to investors while maximizing national benefit.”
Copper Price Forecast 2026: Drivers and Market Resilience
As of Monday, May 25, 2026, the urgency behind Zambia’s production goals is underscored by the copper market’s tightening supply picture. As the global energy transition accelerates, copper remains the “indispensable metal” for electric vehicles (EVs), renewable energy grids, and high-performance computing infrastructure.
Recent analysis on copper demand for AI data centers and the 2026 outlook suggests a widening supply gap that could support prices well into the decade. In that context, ZCCM-IH’s royalty pivot can also be read as a direct response to the 2026 copper supply shock, giving the state a more reliable claim on revenue at a time when scarce, strategic copper assets are becoming more valuable.
| Scenario | Copper Price Forecast 2026 (Per Tonne) | Market Drivers |
|---|---|---|
| Bear Case | $7,500 – $8,000 | Global recession, slower China recovery, surplus supply from new projects. |
| Base Case | $8,500 – $9,500 | Sustained EV growth, moderate grid expansion, balanced supply/demand. |
| Bull Case | $10,500+ | AI-driven data center boom, supply disruptions in Chile/Peru, rapid decarbonization. |
For ZCCM-IH, the combination of higher production volumes and a royalty-based model creates significant financial leverage. If Zambia meets its production targets while prices stay in the base-to-bull case range, the state’s revenue could see a multi-fold increase by 2026 and 2027. The shift also has implications for M&A valuations through the rest of 2026, as buyers and sellers reassess how royalty burdens, state participation, and supply scarcity affect asset-level cash flow assumptions across the Copperbelt.
The 2031 Vision: 3 Million Tonnes
The Zambian government’s ambitious target of 3 million tonnes of copper production by 2031 represents a nearly fourfold increase from current levels. Achieving this will require more than just restructuring stakes; it necessitates massive brownfield expansions and the rapid development of new projects.
The Mopani Copper Mines (MCM) are central to this plan. Following the entry of International Resources Holdings (IRH) as a 51% strategic partner, ZCCM-IH retains a 49% stake. The goal is to ramp up Mopani’s production significantly, which has lagged due to underinvestment during the Glencore era.
“Mopani is the cornerstone,” a senior Zambian mining official stated. “Between Mopani’s recovery, the expansion at Kansanshi, and the stabilization of KCM, we are building the foundation to hit that 3-million-tonne mark.”
Balancing National Interests and Investor Confidence
ZCCM-IH’s new strategy reflects a broader trend among resource-rich nations to move away from passive ownership toward “active participation.” This includes not only financial restructuring but also a focus on local content and mineral value addition, such as domestic smelting and refining.
Investors are watching closely. While royalty models provide more stability for the state, they can sometimes be seen as an additional cost for operators, especially during high-price environments where a gross royalty can be more expensive than a profit-based dividend.
However, the Zambian government has worked to maintain a competitive tax regime. The stability provided by a professional investment vehicle like ZCCM-IH: which is listed on the Lusaka, London, and Euronext exchanges: is seen as a mitigating factor for sovereign risk.
Outlook: A New Era for ZCCM-IH
As of Monday, May 25, 2026, ZCCM-IH is positioning itself as a diversified mining house with interests in copper, gold, and manganese. The company is even weighing the creation of its own metals trading unit to further capture value across the supply chain.
For the global mining industry, Zambia’s transformation is a bellwether for how other African nations might manage their critical mineral wealth. By prioritizing consistent royalty income and seeking higher stakes in strategic assets, ZCCM-IH is attempting to decouple national development from the volatility of corporate balance sheets. It also signals a tougher valuation backdrop for acquirers for the remainder of 2026, particularly where governments are seeking a larger, more durable share of project economics in response to the copper supply shock.
Whether Zambia hits the 3-million-tonne target remains a point of debate among analysts, but the structural changes at ZCCM-IH ensure that for every pound of copper extracted, the state’s return is more secure than ever before. This evolving landscape is a key reason why mining professionals and investors continue to monitor mining news in the region so closely.
