Africa’s two largest copper producers, the Democratic Republic of Congo (DRC) and Zambia, are increasingly focused on securing a direct stake in the metals trading sector, driven by the rising demand for copper linked to artificial intelligence, electric vehicles, and the global transition to greener energy. The push for trading rights comes as both countries seek to capitalize on the surging demand and potential profits from the metal, which represents a critical component in many of today’s technological advancements.
Traditionally dominated by international trading houses such as Glencore, the metals trading industry is now seeing a shift, with both Congo and Zambia taking steps to ensure they can also profit from the sale of their copper. Together, the two nations account for over 13% of the world’s copper supply.
In a significant move, Congo's state-owned mining company, Gecamines, is close to finalizing an agreement with Glencore to secure an allocation of about 51,000 metric tons of copper from the Kamoto Copper Company (KCC). Sources familiar with the deal, who requested anonymity, indicated that the agreement is expected to be finalized soon, although no exact date has been set. Gecamines has also been actively involved in trading copper, having secured nearly 100,000 tons of copper as part of its 20% stake in Tenke Fungurume Mining, following a deal with Chinese mining company CMOC Group in July 2023.
The Congolese government is also exploring ways to increase its control over the sale of copper in projects where it holds a stake. For example, Congo owns a 20% stake in Ivanhoe's Kamoa-Kakula mine, which is projected to produce between 520,000 and 580,000 tons of copper this year. Gecamines is also looking to secure more copper from its interests in producers such as Zijin Group.
Zambia is also pursuing greater involvement in copper trading, evident in its collaboration with Swiss trading company Mercuria. In December, the two parties established a joint venture focused on copper trading, with Mercuria committing an initial budget of $500 million to purchase copper from local producers. This move comes as Zambia seeks to move beyond simply receiving dividend payments from its stakes in projects involving international companies, such as Vedanta Resources, First Quantum Minerals, and Barrick Gold. The Zambian government aims to buy copper directly from these projects on commercial terms before negotiating for physical metal in proportion to its shareholding.
The growing focus on metals trading in both countries will likely be a key topic of discussion at the upcoming Mining Indaba conference in Cape Town. The push for greater control over copper resources reflects broader concerns across Africa regarding the concentration of mining profits in the hands of international firms. While the potential for significant profits from copper trading is clear, experts caution that the shift could lead to tensions and disputes, particularly over the allocation of metal production and pricing.
Analysts are divided on whether these initiatives will lead to greater financial success for the African governments. Some suggest that increased government involvement in trading could offer more leverage over copper prices, potentially enhancing local economic growth. However, there are concerns that such moves could deter private investors, who may see the increased state involvement as a threat to their profitability. Others remain skeptical, warning that government control over trading may not yield the expected benefits and could exacerbate existing tensions over resource distribution and dividends.
As both Congo and Zambia navigate this complex landscape, the global market is closely watching the evolving dynamics between government control and private sector interests in Africa's copper sector. The outcome of these efforts could significantly shape the future of the copper market, particularly as demand continues to rise in the wake of technological advancements and the shift toward renewable energy.
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