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Zambia plans law compelling miners to procure locally: minister

FILE PHOTO: An aerial view of the Konkola mine project in Chililabombwe, Zambia.

LUSAKA (Reuters) - Zambia is planning a law to compel mining companies to give local suppliers a fair share of procurement, its mines minister said on Thursday, in the latest sign of the government taking an interventionist approach in its mining sector.

Zambia is Africa's second-largest copper producer, with copper mining accounting for around 70% of foreign currency earnings.

The government has been pushing mining firms to invest more locally and is currently locked in a court dispute with Vedanta over its Konkola Copper Mines business.

Other foreign miners operating in Zambia include Canada's First Quantum Minerals, Barrick Gold Corp and Glencore.

Mines Minister Richard Musukwa said during a meeting with suppliers, labour unions and other officials on the proposed law that the mining sector imported goods and services worth over $4 billion annually but only 10 percent went to local suppliers.

"This is a mismatch and must not be entertained. Mining investors have been a darling of foreign contractors," Musukwa said, without specifying how much the government wanted miners to procure locally.

Zambia's comparative advantage is in mining, and the government needs to ensure that the mining industry drives growth in other sectors of the economy, Musukwa added.


(Reporting by Chris Mfula; Editing by Alexander Winning and Elaine Hardcastle)