Talks between First Quantum Minerals (FQM) and government have reached an advanced stage on the opening of the US$350 million Kalumbila Multi-Facility Economic Zone (MFEZ) in North-Western Province.
The promise of the new multi-million dollar economic zone is set to boost trade and jobs in North-Western Province as part of FQM’s efforts to help Zambia attract further foreign direct investment.
South American-based metal parts manufacturer and mining services company Compañía Electro Metalúrgica (Elecmetal) from Chile is spearheading the development. The flagship investor has signed contracts for a US$40 million mill ball factory in Kalumbila, and is poised to start construction once the MFEZ has been formally designated by the government.
According to the Ministry of Commerce, Trade and Industry: “The implementation of MFEZs in Zambia is designed to make Zambia competitive through increased activity in the trade and manufacturing sectors, which have numerous positive spillover effects in other sectors such as utilities, transport, agriculture and services.
“The MFEZs blend the best features of the free trade zones (FTZs), export processing zones (EPZs) and the industrial parks/zones concept and create the administrative infrastructure, rules, regulations etc that benchmark among the best dynamic economies. The blending of physical infrastructure with an efficient and effective administrative infrastructure will create the ideal investment environment for attracting major world class investors,” says the ministry on its website.
In visiting the mine in October last year Finance Minister Hon. Felix Mutati and Minister of Commerce, Trade and Industry Hon. Margaret Mwanakatwe pledged the government would expedite approval of the MFEZ, work on which was started in 2012 with a development horizon of about five years. It is part of FQM’s vision of ensuring that Kalumbila functions as a standalone town and is designed to carry on beyond the lifespan of the company’s Sentinel mine. It is predicted to shape and build North Western Province’s economic ties, creating more opportunities for business houses, multinationals and entrepreneurs.
“At the moment, we are looking at attracting private investment. And the only way we can attract private sector investment is by providing incentives. We have preliminary approval from the Zambia Development Agency (ZDA) and we are now in discussions with the Ministry of Commerce, Trade and Industry together with the ZDA to finalise a Statutory Instrument declaring the Multi-Facility Economic Zone for Kalumbila,” said Kalumbila Town coordinator Michael Kabungo.
In addition to Elecmetal, the multi-million dollar Kalumbila Multi Facility Economic Zone has attracted interest from various investors ranging from mine equipment suppliers, manufacturers to companies in construction, retail, hospitality, finance, warehousing, food processing, catering and other service industries, and including heavy equipment supplier BIA Zambia.
“The contractor of the mill ball plant is on site. This is a joint venture between Electmetal which is a Chilean company and a Chinese company to set up a mill ball factory on a four-hectare plot and the factory itself is two hectares under one roof, which is a big investment for Kalumbila and the joint venture’s first project in Africa. I think it will kick start development in the Kalumbila Industrial Park where BIA is operating from,” said Mr Kabungo.
He said that the mill ball plant was estimated to employ close to 300 people during the construction phase, and also employ a further 290 people during operations.
“It is planned that the mill ball factor, the first to be opened in Zambia after Scaw Limited Zambia should start production by the first quarter of 2018 and should start delivering mill balls to the mines in North Western Province and possibly to other mines on the Copperbelt and in the Congo,” he explained.
“It will play a major role in bringing in foreign exchange, because you can imagine the mines now are importing mill balls from China. This is all foreign exchange that is going out through importation of mill balls and with the plant being set up here, it’s provides incentives for other industries to set up in the Kalumbila Industrial Park. The company is also targeting the Congo for supply of mill balls so that additional income will come into the country in the form of foreign exchange,” said Mr Kabungo.
“This project represents the spirit and determination of business houses and multinationals, as well as entrepreneurs in Zambia who are now taking destiny into their own hands,” added Mr Kabungo. “The MFEZ was created to support their initiatives, and it is pleasing that the government has been supportive in moving this project forward. It is helping to build a conducive environment for businesses and investors to flourish in.”
The setting-up of the Kalumbila Multi-Facility Economic Zone is expected to make a huge contribution to the growth of medium to large industries in Kalumbila, while also increasing job opportunities through spin-off commercial activities in the region.
The Ministry of Commerce, Trade and Industry website explains that MFEZs are special industrial zones for both export-oriented and domestic-oriented industries. The zones will have the well-appointed infrastructure in place in order to attract and facilitate establishment of world-class enterprises in the zone.
The Multi-Facility Economic Zone (MFEZ) concept falls under the auspices of the Triangle of Hope (ToH) initiative that was introduced to Zambia in 2005 by the Japanese Government through Japan International Corporation Agency (JICA).
The ToH initiative is aimed at creating the platform for Zambia to achieve economic development by attracting significant domestic and foreign direct investment (FDI) through a strengthened policy and legislative environment. The initiative emphasises on political will and integrity, private sector dynamism and integrity and civil service efficiency and integrity as key forces that enable the economy to attain accelerated economic development.