Policy centre calls for stronger domestic value addition as copper prices hit record highs

The Centre for Trade Policy and Development (CTPD) has urged the Zambian government to take advantage of the ongoing surge in global copper prices by strengthening local value addition and introducing fiscal measures that allow the State to benefit more meaningfully from extraordinary price windfalls. CTPD Lead Trade and Investment Researcher, Barnabas Mwale, noted that global copper prices had breached historic thresholds, with copper trading above US$10,000 for sustained periods and reaching as high as US$13,000 per metric tonne on the London Metal Exchange (LME). In a statement issued on Wednesday, Mwale explained that the price rally reflected a structural shift in global demand for copper, driven by its central role in long-term decarbonisation and digitalisation strategies worldwide.

“Global copper demand is projected to rise from approximately 27 million metric tonnes in 2024 to as much as 42 million metric tonnes by 2040,” Mwale said. He attributed this increase to the rapid expansion of electric vehicle production, renewable energy infrastructure, and the growth of data centres supporting Artificial Intelligence (AI) technologies. For Zambia, Africa’s second-largest copper producer, Mwale described the current market conditions as both an economic opportunity and a test of the country’s industrialisation and mining legal frameworks.

While rising copper prices were boosting export earnings, Mwale warned that the distribution of these gains remained highly uneven. He noted that much of the current price increase was driven by external global demand dynamics rather than productivity improvements within mining firms, meaning a large share of the windfall profits is accruing without proportional increases in domestic value addition or fiscal contribution. Mwale highlighted that Zambia currently benefits from copper price spikes through a price-based sliding scale Mineral Royalty Tax (MRT), which was designed to provide revenue certainty and reduce vulnerabilities associated with profit-based taxes.

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Under the current regime, royalties are set at: 10 percent when prices exceed US$7,000 per tonne, 8.5 percent for prices between US$5,000 and US$6,999, 6.5 percent for prices between US$4,000 and US$4,999, and four percent when prices fall below US$4,000. However, Mwale cautioned that while the sliding scale royalty model improved revenue certainty, it also limited the State’s ability to participate meaningfully in extreme price windfalls. CTPD further observed that mineral royalty tax contributions remained relatively low. According to the 2025 Zambia Revenue Authority (ZRA) statistics, collections stood at K16 billion against a target of K17.4 billion.

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