Zambia's government is adopting a more strategic approach to the copper market by launching a metals trading company in collaboration with commodity trader Mercuria.

An analyst has described this move as a “level-headed and intentional approach,” especially in contrast to past government interventions in the sector.

The partnership, finalised last month, involves Mercuria and Industrial Resources Limited, a fully owned subsidiary of the Industrial Development Corporation (IDC), Zambia’s government investment arm, as the country aims to ramp up its copper production to 3 million tonnes annually.

In a statement, Mercuria has hailed the collaboration as a “bold step in Zambia’s resource governance strategy.” 

The partnership’s key objectives include establishing an independent marketing and trading capacity for Zambia’s copper resources, creating a local pipeline for metals trading, and fostering human capital development through knowledge and skills transfer from Mercuria to the local workforce.

In addition, the collaboration aims to enhance transparency and efficiency in mineral trading and increase Zambia’s involvement in global commodity markets.

Although details on timelines, financing, and expected revenues have not been revealed, IDC Chief Executive Cornwell Muleya stated that the initiative will “position Zambia as a key player in international markets.” 

In 2022, Zambia was ranked as the world’s ninth-largest producer of copper, according to Natural Resources Canada.

Copper exports are crucial to Zambia's economy, accounting for nearly $10 billion of its $29.2 billion GDP in 2022. Currently, nearly half of these exports are sent to Switzerland, which hosts numerous commodities traders who purchase the metal for re-export to other global markets.

Through the new joint venture, the Zambian government will take a more direct role in procuring and marketing a portion of the country’s copper production.

The timing of the partnership with Mercuria is no coincidence, according to Pangea-Risk Africa analyst Zaynab Hoosen, who shared her insights with Global Trade Review.

“Zambia’s government has decided to [establish the joint venture] now before the boom that is expected to occur over the next couple of years,” Hoosen said. “By then, the company will already be set up and in a good position, having gained some experience from Mercuria over these years.”