May 2008 Zambia1 Investing > US$500,000 in a priority sector or in the MFEZ shall enjoy the following incentives: Zero percent tax rate on dividends for

May 2008ZambiaZambia 11

Investing > US$500,000 in a priority sector or in the MFEZ Investing > US$500,000 in a priority sector or in the MFEZ shall enjoy the following incentives:shall enjoy the following incentives:

Zero percent tax rate on dividends for 5 years from the Zero percent tax rate on dividends for 5 years from the date of first declaration; date of first declaration;

Zero percent tax on profits for 5 years from the first year Zero percent tax on profits for 5 years from the first year profits are made. For year 6 to 8, only 50 percent of profits are made. For year 6 to 8, only 50 percent of profits are taxable and years 9 & 10, only 75 percent of profits are taxable and years 9 & 10, only 75 percent of profits are taxable.profits are taxable.

Zero percent import duty rate on raw materials, capital Zero percent import duty rate on raw materials, capital goods, machinery including trucks and specialised motor goods, machinery including trucks and specialised motor vehicles for five years.vehicles for five years.

Deferment of VAT on most machinery and equipment Deferment of VAT on most machinery and equipment including trucks and specialised motor vehiclesincluding trucks and specialised motor vehicles

Comprehensive Fiscal RegimeComprehensive Fiscal Regime


Dividends in the assembly of motor vehicles, Dividends in the assembly of motor vehicles, motor cycles and bicycles exempt from tax motor cycles and bicycles exempt from tax first 5 years;first 5 years;0 – 5% Import duty on most capital goods for 0 – 5% Import duty on most capital goods for production and computer parts on machinery production and computer parts on machinery used in textiles, clothing, roofing sheetsused in textiles, clothing, roofing sheetsZero percent Duty on inputs in textiles and Zero percent Duty on inputs in textiles and clothingclothingSMEs qualify for incentives – corporate tax 0% for 3 years for urban and 5 years for ruralNon Fiscal

Facilitationwork and immigration permits, land acquisition, secondary licenses, utilities

Stability and protection


Almost all sectors and products processed are Almost all sectors and products processed are coveredcovered

Moving from primary commodities to low tech manufacturing and knowledge based economy

Drive for economic diversificationDrive for economic diversification Mining centered on value addition Mining centered on value addition Medical and education not social but economic Medical and education not social but economic

sectorssectors

Priority Sectors – Very Wide …Priority Sectors – Very Wide …

May 2008

ProjectsProjects


Mining and Mineral Processing Mining and Mineral Processing OpportunitiesOpportunities

Mineral deposits in Zambia are classified Mineral deposits in Zambia are classified into:into:– Base metals;Base metals;– Energy minerals;Energy minerals;– Precious metals;Precious metals;– Industrial minerals; andIndustrial minerals; and– Gemstones.Gemstones.

Mining

May 2008

Investment Opportunities:Investment Opportunities:Mining & Mineral ProcessingMining & Mineral Processing

Copper:Copper: copper exploration in Lusaka, North Western copper exploration in Lusaka, North Western Central Provinces.Central Provinces.Iron:Iron: exploration for iron in North Western, Lusaka and exploration for iron in North Western, Lusaka and central provinces.central provinces.Nickel:Nickel: development of nickel mine at Munali Hills, near development of nickel mine at Munali Hills, near Kafue gives opportunities for further exploration .Kafue gives opportunities for further exploration .Gold:Gold:indicated in Northern Province, parts of the Katanga indicated in Northern Province, parts of the Katanga ore - more than 300 gold occurrences recorded:-ore - more than 300 gold occurrences recorded:-– Largest historical producers Dunrobin (990 kg; Matala Largest historical producers Dunrobin (990 kg; Matala

(225 kg) in Mumbwa District; Jessie (390 kg) in the (225 kg) in Mumbwa District; Jessie (390 kg) in the Rufunsa area; (iii) and Sasare (390 kg) in Eastern Rufunsa area; (iii) and Sasare (390 kg) in Eastern Zambia.Zambia.

– Luiri Gold Mines prospecting the Mumbwa deposits - Luiri Gold Mines prospecting the Mumbwa deposits - feasibility study to resume mining operations in the area.feasibility study to resume mining operations in the area.

– Further deposits – Chisamba (Kaputa), Mbala (Senga Further deposits – Chisamba (Kaputa), Mbala (Senga Hill), Lundazi (Msidza River), Nyimba, Zambezi, Lusaka Hill), Lundazi (Msidza River), Nyimba, Zambezi, Lusaka (Leopards Hill)(Leopards Hill)


Mining and Mineral ProcessingMining and Mineral ProcessingOnly 24 % exploredOnly 24 % explored

Opportunities in gold, copper, cobalt, uranium, zinc, Opportunities in gold, copper, cobalt, uranium, zinc, nickel, substantial iron resources identifiednickel, substantial iron resources identified

Precious stones – diamonds and emeralds occurrence Precious stones – diamonds and emeralds occurrence indicates significant exploration potentialindicates significant exploration potential

Copper smelting capacity shortfall of Copper smelting capacity shortfall of ±300,000 tp.a.±300,000 tp.a.– Zambia and overspills from DRCZambia and overspills from DRC– Tolling agreement potential high – given 15% export tax on Cu. Tolling agreement potential high – given 15% export tax on Cu.

ConcentrateConcentrate

Industrial chemicals – limestone, Industrial chemicals – limestone,

Mining

May 2008


Manganese: Manganese: in northern and central parts of the in northern and central parts of the country, all deposits with high ore content ranging country, all deposits with high ore content ranging between 48% and 54%between 48% and 54%Tin:Tin: Mostly from the Choma Tin Belt in Southern Mostly from the Choma Tin Belt in Southern Province, Mporokoso, Lundazi, MkushiProvince, Mporokoso, Lundazi, MkushiGemstones:Gemstones: are known to occur in many parts of are known to occur in many parts of Zambia Zambia – joint ventures with existing small-scale operators or in joint ventures with existing small-scale operators or in

green fields in Emeralds, Amethyst, Aquamarine, green fields in Emeralds, Amethyst, Aquamarine, Tourmaline, Garnets, and Beryl. Tourmaline, Garnets, and Beryl.

May 2008


Phosphates:Phosphates: Petauke in Eastern Province1.6m Petauke in Eastern Province1.6m tonnes; Mumbwa at least 700,000 tonnes; tonnes; Mumbwa at least 700,000 tonnes; Rufunsa at least 200 m tonnes; Isoka town, at Rufunsa at least 200 m tonnes; Isoka town, at least 200 million tonnes.least 200 million tonnes.Other Industrial minerals:Other Industrial minerals:– Limestone – Lusaka, Kabwe, Ndola, N/Western, Limestone – Lusaka, Kabwe, Ndola, N/Western,

Northern, LuapulaNorthern, Luapula– Ball and Brick clays – Solwezi, SerenjeBall and Brick clays – Solwezi, Serenje– Silica sand – Kapiri Mposhi for Glass. Silica sand – Kapiri Mposhi for Glass.

Feldspar:Feldspar: Deposit near Siavonga and Kapiri Deposit near Siavonga and Kapiri MposhiMposhiDimension Stone:Dimension Stone: Grey and white marbles – Grey and white marbles – Lusaka, Solwezi, Mpika, ChipataLusaka, Solwezi, Mpika, Chipata

May 2008

No.No. DescriptionDescription Capacity Capacity (MW)(MW)

Cost (US$ ) Cost (US$ ) millionmillion

11 Itezhi-tezhi Itezhi-tezhi 120 120 150150

22 Kariba North ExtensionKariba North Extension 360360 360360

33 Kafue Gorge Lower Kafue Gorge Lower 750750 900900

44 Batoka Gorge Batoka Gorge 800800 2,2002,200

55 Kalungwishi RiverKalungwishi River 210210 600600

66 Devil’s GorgeDevil’s Gorge 600600 1,6551,655

77 Lusiwasi Extension Lusiwasi Extension 4040 100100

88 Mpata Gorge Mpata Gorge 500500 839839

99 Lupaula River Lupaula River ((Mombotuta, Mombotuta,

MambilimaMambilima))850850 2,5002,500

TOTALTOTAL 4,2504,250

Hydro-Electricity

May 2008

Investment Opportunities:Investment Opportunities:Energy Mineral & Mineral ProcessingEnergy Mineral & Mineral Processing

CoalCoal – Maamba area and Luangwa, Luano- – Maamba area and Luangwa, Luano-Lukusashi valley, Barotse basin;Lukusashi valley, Barotse basin;Uranium Uranium – Tip of Lake Kariba and Lumwana – Tip of Lake Kariba and Lumwana areaareaPetroleumPetroleum - -Strong indications for oil and gas by - -Strong indications for oil and gas by Microbial Prospecting for Oil and Gas (MPOG) inMicrobial Prospecting for Oil and Gas (MPOG) in– North Western Province – Preparing for call for tenders North Western Province – Preparing for call for tenders

for detailed prospecting workfor detailed prospecting work– MPOG method xtended to the Rift Valley in Eastern MPOG method xtended to the Rift Valley in Eastern

Province where Mobil and Placid Oil did some work, Province where Mobil and Placid Oil did some work, including drilling between 1986 and 1991including drilling between 1986 and 1991

Smelting facilities Smelting facilities – current shortfall 300,000 – current shortfall 300,000 tpa; toll treatment opportunitiestpa; toll treatment opportunities

May 2008

Investment Opportunities:Investment Opportunities:ManufacturingManufacturing

Value addition to copperValue addition to copper– Cu Tubes, Alloys, Rods, etcCu Tubes, Alloys, Rods, etc

Cotton ClustersCotton Clusters– Cotton growingCotton growing– TextileTextile– ClothingClothing

Metal/Engineering works – Joint ventures Metal/Engineering works – Joint ventures Wood processing – value additionWood processing – value addition

ZDA

May 2008

Investment Opportunities:Investment Opportunities:Agriculture Farm BlocsAgriculture Farm Blocs

In 2002 the government identified farming In 2002 the government identified farming blocks in nine areas, one in each provinceblocks in nine areas, one in each province

EEach farming block to haveach farming block to have– At least one core large-scale farm of 10 000 ha;At least one core large-scale farm of 10 000 ha;– Commercial farms of 1 000 to 5 000 hectares;Commercial farms of 1 000 to 5 000 hectares;– Small holdings – sizes of 30 to 300 haSmall holdings – sizes of 30 to 300 ha

Government to provide basic infrastructure - Government to provide basic infrastructure - trunk roads, bridges, electricity, dams, trunk roads, bridges, electricity, dams, schools and health centers in farm blocksschools and health centers in farm blocks


ICT - projectsICT - projects

Present marketPresent market– Zambia 12 million – region – 400 millionZambia 12 million – region – 400 million– All ICT equipment is imported from mainly AsiaAll ICT equipment is imported from mainly Asia– Mauritius / South Africa – major competitorMauritius / South Africa – major competitor– Semi-skilled labour, land etcSemi-skilled labour, land etc– Infrastructure – Multi Facility Economic ZonesInfrastructure – Multi Facility Economic Zones

Accommodate – tech parksAccommodate – tech parks

To require – skilled labour – permits obtainedTo require – skilled labour – permits obtained

– ICT policy aims to develop local talent in software developmentICT policy aims to develop local talent in software developmentBy ICT technology/Hub parksBy ICT technology/Hub parks

ICT projects


Technology Hub / park developmentTechnology Hub / park developmentMinistry of CommunicationsMinistry of Communications

Enterprise & software developmentEnterprise & software development– In Multi-Facility Economic ZonesIn Multi-Facility Economic Zones– Project seeks investors to develop tech parks & software developmentProject seeks investors to develop tech parks & software development

Call Centre establishmentCall Centre establishment– Increasingly becoming popularIncreasingly becoming popular– Several MNC’s needing to support international transactions in HR, distribution, procurement at globalSeveral MNC’s needing to support international transactions in HR, distribution, procurement at global– Location – Multi-facility Economic ZonesLocation – Multi-facility Economic Zones– Big corporations that could support call centre business includeBig corporations that could support call centre business include

Lafarge, copper mines BP Plc etcLafarge, copper mines BP Plc etc

– InputsInputslabour English speaking availablelabour English speaking available

2.5Gbps fibre optic fibre laid over 1,700 km by state corporations2.5Gbps fibre optic fibre laid over 1,700 km by state corporations

ICT projects


ICT – projects – Ministry of ICT – projects – Ministry of CommunicationsCommunications

Manufacture of ICT equipmentManufacture of ICT equipment– TV, telephone handsets, computersTV, telephone handsets, computers

Ideal in Multi-facility economic zoneIdeal in Multi-facility economic zone

Labour and land availableLabour and land available

Infrastructure Infrastructure – Rail, road and air to all destinationsRail, road and air to all destinations

ICT projects

May 2008

Investment Opportunities: Investment Opportunities: Health SectorHealth Sector

Pharmaceuticals:Pharmaceuticals:Only 7 Manufacturing Companies in Only 7 Manufacturing Companies in Zambia mostly engaged in the Zambia mostly engaged in the Manufacture of Basic Pharmaceutical Manufacture of Basic Pharmaceutical Formulations (Medicines).Formulations (Medicines).The Majority of Drugs required under The Majority of Drugs required under the Essential Drug List are still being the Essential Drug List are still being imported.imported.

May 2008

Investment Opportunities:Investment Opportunities:Construction Construction

Shopping malls – Chirundu, KasumbalesaShopping malls – Chirundu, Kasumbalesa

Border Control facilities – Kasumbalesa Border Control facilities – Kasumbalesa (PPP) (PPP)

Toll road opportunities (PPP)Toll road opportunities (PPP)

Accommodation – Residential, Office and Accommodation – Residential, Office and Warehousing Warehousing

May 2008nananananana 1919

Summary Summary

– Project listing availableProject listing available– Further enquiries welcome & to be provided Further enquiries welcome & to be provided

with project detailswith project details– ContactsContacts

Zambia Development AgencyZambia Development Agency

Email: Email: [email protected]

Tel: 260 1 220177 Lusaka, ZambiaTel: 260 1 220177 Lusaka, Zambia

Section heading goes here

Documents

May 2008 Zambia1 Investing > US$500,000 in a priority sector or in the MFEZ shall enjoy the following incentives: Zero percent tax rate on dividends for