Measuring the distribution and multipliers of local procurement in the mining industry in Zambia

Zambia has a long history of copper mining. This project will map the mining sectors’ linkages to the economy (locally, regionally, nationally, and internationally) by using tax data on acquisitions by mining companies. In addition, it aims to develop and test policies to strengthen sustainable and inclusive local procurement policies.

Previous research has focused on local labour markets measured through household surveys. Using VAT data will provide a unique analysis on the formal economic multipliers of the mining industry and contribute to Zambia’s mining industry government as well as many low- and middle-income countries alongside it.

Zambia is a uniquely rich setting to explore such issues: it has both small scale artisanal mining and large-scale mining, a rich mining history, and a lot of potential for development in the sector.

We will look at examining the questions: Which types and what percentage of the transactions are with local, regional, national and international companies? How do these patterns differ across crucial aspects like ownership, formalisation, size, mineral/metal type, production style, and corporate responsibility policies?

This multi-site and sector analysis will also highlight the link between production volumes and local procurement. How does one dollar or unit increase in production lead to an increase in local procurement? Do increases in value created, through changes in the metal/mineral price or in production, translate into higher local spending?

Answering these questions will be informative to develop policies aiming to strengthen the local linkages.