Zambia has recently joined the trend of implementing local content regulations in the mining sector, becoming the latest African country to do so.
On 14 October 2025, the Ministry of Mines and Minerals Development (MMMD) issued the Geological and Minerals Development (Preference for Zambian Goods and Services) Regulations, 2025 (the Regulations) with the aim of increasing local participation in the mining sector.
The Regulations, which were issued in accordance with section 10 of the Geological and Minerals Development Act of 2025, are part of the Government’s ongoing efforts to increase local participation and value addition in the mining sector through targeted local content measures.
The Regulations apply to all mining companies and mining-related companies operating in Zambia and will be enforced starting from 1 January 2026.
This article provides an overview of the Regulations and the impact that they will have on the mining supply value chain.
Mining companies and mining-related companies
A mining company is defined as either a small-scale or large-scale mining company, while a mining-related company refers to a company involved in the minerals value chain. The chain includes the processing, refinement, and transformation of minerals into higher-value products.
Therefore, the Regulations capture not only entities directly involved in mining, but also those that supply goods and services within the minerals value chain, including processing, support, and other ancillary activities.
Local procurement quotas
The Regulations mandate that every mining and mining-related company must allocate at least 20% of its annual procurement budget to local companies providing core mining goods or services within six months of commencement, specifically by 30 June 2026. This procurement quota will then rise to 25% within one year, 35% within two years, and ultimately to a minimum of 40% within five years of the commencement date.
Furthermore, the procurement of non-core mining goods or services critical to mining operations is exclusively reserved for local companies.
To qualify as a local company, the Regulations adopt the classifications outlined in the Citizens Economic Empowerment Act 9 of 2006 (CEEA). According to the CEEA, a citizen-empowered company is one where citizens own between 25% and 50% of the equity and are involved in management, while a citizen-owned company is one where citizens own more than 50% of the equity and have significant control over management.
These definitions provide the framework for mining and mining-related companies to determine the level of Zambian participation needed to meet the requirements of the Regulations.
Businesses captured by the Regulations must also establish mechanisms to demonstrate compliance through quarterly reporting to the MMMD. These reports should contain company and site information, procurement disclosures, supplier beneficial ownership information, and details of supplier development programmes.
Compliance and penalties
A company that fails to comply with the Regulations commits an offence and, upon conviction, is liable to a fine not exceeding ZMW 400 000 (approximately USD 17 690) and an additional ZMW 20 000 (approximately USD 885) for each day the offence continues. If the contravention is committed with the knowledge or consent of a director, manager, shareholder, or partner, that individual may also be held personally liable.
The Regulations are grounded in the National Mineral Resources Development Policy (2022), which seeks to increase Zambian ownership and participation in the mineral value chain and promote domestic procurement. The policy also recognises that large-scale mining operations have historically been dominated by foreign investors and calls for deliberate measures to promote partnerships between foreign investors and Zambians, facilitate access to capital and technology, and develop local supplier capacity.
While the Regulations do not differentiate between citizen-empowered and citizen-owned companies for preference purposes, the underlying policy direction anticipates a gradual shift towards stronger incentives for citizen-owned and locally manufacturing entities.
Looking ahead
In practice, all mining and mining-related companies are expected to review and realign their procurement frameworks, ownership structures, and supplier development strategies before the Regulations come into effect on 1 January 2026.
Companies should verify the beneficial ownership of their shareholders to determine eligibility under the CEEA, identify opportunities to improve local sourcing, and establish internal reporting systems to meet quarterly disclosure requirements.
Early planning for compliance and engagement with local suppliers will be crucial to ensuring operational continuity and regulatory alignment as Zambia’s localisation framework in the mining sector is implemented.
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