By Doreen Chembe
Four commercial banks have partnered with First Quantum Minerals –FQM- to improve access to finance for Zambian businesses supplying goods and services to the mining industry.
The banks are ZANACO, ABSA, FNB and STANBIC Bank.
The four financial institutions have signed a Memorandum of Understanding with FQM under the Local Content Financing Initiative, which is aimed at providing funding to Zambian suppliers and contractors seeking to do business with mining companies.
Speaking during the signing ceremony in Lusaka, FQM Country Director ANTHONY MUKUTUMA said the Government’s Local Content Regulations have created opportunities for local businesses, but many have been unable to secure contracts because they lack access to capital.
Mr. MUKUTUMA said many Zambian companies have the skills and capacity to supply equipment, engineering services, transport, construction materials and other goods required by the mining industry, but struggle to obtain affordable financing to purchase machinery, employ workers and fulfil contracts.
He said mining should not only generate copper, jobs, taxes and mineral royalties, but should also create business opportunities for thousands of local suppliers.
Mr. MUKUTUMA said FQM spent more than US$2 billion on goods and services last year, adding that a greater share of that expenditure should go to Zambian-owned businesses.
He said increasing local participation in the mining sector requires support from both mining companies and financial institutions to ensure local businesses have access to affordable capital.
Meanwhile, ZANACO Chief Executive Officer MUKWANDI CHIBESAKUNDA said the initiative is intended to enable more Zambian businesses to benefit from the country’s expanding mining industry.
Dr. CHIBESAKUNDA said as Zambia works towards the Government’s target of producing three million metric tonnes of copper annually by 2031, local businesses should also grow by supplying goods and services to the sector.
She said many small and medium-sized enterprises have the expertise to serve the mining industry but are unable to take on larger contracts because they lack financing for equipment, stock and operational costs.
Dr. CHIBESAKUNDA said ZANACO will offer tailored financing solutions under the initiative to help suppliers purchase equipment, strengthen working capital and deliver mining contracts.
She has urged local suppliers and contractors to take advantage of the initiative, saying stronger indigenous businesses will help build a more resilient mining sector and drive economic growth.
(Images credit FQM)
