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Zambia Mining Report Q2 2016

Zambia Mining Report Q2 2016

BMI View: Zambia's mining royalty reversal will support the sector's investment outlook. However, bothlow copper and coal prices and the country's high degree of mineral policy uncertainty will continue tolimit the sector's production growth until the country's Presidential elections in 2016.

Latest Developments & Structural Trends

Mineral policy uncertainty will continue to hurt the sector's growth. Although the April 20, 2015downwards royalty tax revision is positive news for miners, mineral policy uncertainty will limit a shareof investors from entering the sector. The new royalty tax will come into effect on July 1 2015 and willcut royalties on open pit mining from 20.0% to 9.0%. The downwards revision supports our view that theroyalty tax would be unsustainable in its current form (see 'Tax Moderation On The Cards', January 9).

The current Zambian President, Edward Lungu, was narrowly elected on a populist platform in January2015, hence his reaffirmation of the previous mining royalty tax. However, with the April 2015 slashingof the mining tax, Lungu has backpedalled on his populist stance. As a result, we expect mineral royaltiesto become a hot topic for the upcoming 2016 Presidential election and for mining policy uncertainty toremain high.


BMI Industry View
Table: Zambia Mining Industry Value Forecast (2014
2019)
Latest Developments & Structural Trends
SWOT
Industry Forecast
Copper: Major Challenges Ahead
Latest Developments
Table: Copper Production Forecast (Zambia 2012
2020)
Table: Zambia
Major New Copper Projects/ Expansions
Structural Trends
Table: Zambia: Hydropower Projects
Coal: Sold Growth, Despite Weak Project Pipeline
Latest Developments
Table: Coal Production Forecast (Zambia 2012
2020)
Table: Zambia
Coal Projects
Structural Trends
Industry Risk Reward Ratings
Zambia Risk/Reward Index
Rewards
Risks
Africa: Major Risks Remain
Key Takeaways
Latest Revisions
Table: Africa
Mining Risk/Reward Index
Regulatory Development
Zambia Regulatory Development Policy Uncertainty To Curb Growth
Table: Zambia
Trade & Investment Risk Analysis
Commodities Forecast
Commodities Outlook
Table: BMI Commodities Price Forecasts
Competitive Landscape
Table: Zambia Key Players
Comparative Valuation Metrics
Company Profile
First Quantum Q2 2016
Latest Results
Table: First Quantum
Key Financial Data
Global Company Strategy Vedanta Resources Q1 2016
Latest Financial Results
Company Strategy
Table: Vedanta Resources
Supply Chain Analysis
Company Details
Table: Vedanta Resources
Key Financial Data
Regional Overview
Table: SSA
Government Involvement In Mining Sector
Methodology
Industry Forecast Methodology
Sources
Risk/Reward Index Methodology
Table: Weighting Of Indicators

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