Zambia is attracting the attention of the world’s energy and mining companies as it shows significant potential for critical mineral extraction. Innovative technologies have helped uncover massive deposits of copper in Zambia, which could help massively expand the country’s mining industry over the next decade. This discovery could help provide the resources needed for the massive clean tech pipeline and make Zambia a critical minerals hub for years to come.
The digital exploration company KoBold Metals has spent several years developing complex artificial intelligence (AI) technology to enhance mineral exploration activities around the globe. This month, KoBold announced it had likely made the largest copper discovery in over a decade thanks to this technology. The find in Zambia could contribute to the production of 300,000 tonnes of copper annually, worth billions of dollars. When developed, two decades of production in KoBold’s discovery region could provide enough copper to manufacture around 100 million electric vehicles (EVs). A third-party company corroborated KoBold’s claims, agreeing there is significant potential for using AI technology for exploration activities. KoBold hopes to develop a $2.3 billion copper mine in Zambia to commence production by the early 2030s.
The demand for copper and other critical minerals has been rapidly growing in recent years, a trend that shows no sign of slowing as countries around the globe increase their renewable energy capacity and roll out clean technologies. In 2023, the total copper mine production was estimated at around 22 million metric tonnes, marking a significant increase from 16 million metric tonnes in 2010. Production is expected to increase to around 30 million metric tonnes a year by 2036 as the global demand grows. However, there are fears that this increase in supply will not be enough to meet the rapidly rising demand for the critical mineral.
Related: Copper Demand Surge Drives Consolidation Wave in Mining Sector
In addition to renewable energy development, the demand for copper is expected to increase significantly with the rollout of new technologies, such as AI. Data centres will require vast amounts of copper and other critical minerals in the coming years. This is expected to boost the value of copper substantially. According to Bank of America, supply shortages and the growth in demand could increase the price of copper by 11 precent, to $5.44 per pound by 2026. This is bad news for renewable energy producers but great news for countries with untapped copper deposits, just as Zambia.
New exploration technologies are helping mining companies improve their prospects, advancing exploration practices that have remained relatively unchanged over the last century. In addition, as the U.S. is concerned about its heavy reliance on China for critical minerals, new technologies could help American companies boost their mining capacity and ensure the country’s energy security. Connie Chan, a partner at venture capital firm Andreessen Horowitz, stated, “The more you realize how dependent we are on these technologies, the more you ask: How the hell were we so slow to the fact that we needed vast amounts of raw material to make it all possible?”
Recent estimates suggest that Zambia was the world’s 10th largest copper producer in 2023, producing around 4 percent of the world’s copper and increasing its output by 4 percent between 2022 and 2023. Production in the southern African country increased at a CAGR of 2.68 percent between 2017 and 2022 and is expected to grow at a CAGR of 2 percent between 2023 and 2027. Chile, Peru, the Democratic Republic of the Congo (DRC) and China are currently the world’s biggest copper producers, but there is major potential for Zambia to further develop its resources. First Quantum Minerals, Barrick Gold and Glencore are among the major producers operating in Zambia.
Copper exports contribute over $6 billion of Zambia’s annual revenue. However, there is great potential for growth according to a recent report from the London School of Economics’ International Growth Centre (IGC). The industry mainly centres around extraction and early-stage refinement at present, but greater value could be added through the development of Zambia’s downstream activities. Most of Zambia’s copper comes from 10 mines in its Copperbelt province, with new discoveries slowly expanding production to other areas of the country. The IGC suggests that Zambia could attract higher levels of foreign investment in its minerals industry by improving its tax regime, which is currently unstable, and has deterred investors in the past. The IGC report also encourages Zambia to deepen ties with neighbouring DRC to establish a special economic zone (SEZ) to attract investment and create a manufacturing sector to add greater value.
Zambia’s copper mining industry is expected to grow significantly in the coming years, following several successful production years. New technologies, like the AI tech being used by KoBold, could help enhance exploration activities in Zambia to boost production as the global demand for copper rises. In addition, there is significant potential to add value to the sector through the development of its downstream activities and greater collaboration with neighbouring producers the DRC.
By Felicity Bradstock for Oilprice.com
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