By Tinenenji Banda and Marja Hinfelaar

Zambia is a significant source of critical minerals including copper, cobalt, lithium, nickel and graphite. Interest in Zambia’s minerals is growing, particularly from Western countries and China. Unfortunately, due to governance weaknesses, there is ample corruption and illicit financial flows at several transaction levels in the value chain. This U4 Issue therefore identifies government interventions Zambia can use to curtail corruption considering existing political pressures.

Main points

• Intense competition for critical mineral value chains results in an increased risk of revenue leakage due to corruption and tax evasion. Illicit financial flows (IFF) threaten Zambia’s economic development and undermine its fiscal systems.

• Zambia has formal commitments in place, such as laws, regulatory institutions and international commitments, to battle corruption and IFFs, but the institutional architecture is fragmented and inadequately enforced. Inter-agency collaboration is required to address these challenges.

• Through a literature review, including a law and policy review, and a stakeholder mapping exercise with 21 key informant interviews with government, civil society, academic and industry representatives, we constructed a qualitative understanding of the key risk factors for corruption and IFFs.

• Significant factors are the lack of a transparent, coherent and disciplined mining licensing system; a non-transparent bidding process; public-private collusion across value chains; abuse of intermediaries and agents; and weak regulation in the sector.

• Opportunities for interventions are enhanced systems for disclosure and due diligence, reform of the Mining Cadastre, support for evidence-based policymaking, support for the organisation of the artisanal mining sector, enhanced quality of civil society organisation public discourse, and enhanced collaboration in anti-corruption agencies, while keeping political pressures in mind.

By Oluwole Ojewale

Mining and the illicit trade in minerals have long been the source of social and environmental upheaval in the Democratic Republic of Congo (DRC) and coltan, a mineral essential to modern electronics, has become a particular focus of criminal networks. This study reveals a network of organised crime involved in the production and supply chain of coltan, and its connections to legitimate businesses in advanced economies. It raises awareness of the implications of this illicit trade and suggests multi-stakeholder interventions to prevent criminal networks from operating in the Great Lakes Region. Key findings • As 5G technology grows, the demand for coltan increases. • Much of the coltan produced by artisanal mining remains unaccounted for due to the government’s inability to access and regulate mines in remote territories. • Coltan smuggling is enabled by state collusion and corrupted networks of social relations. • Coltan smuggling flourishes because of the differences between the prices set in mining areas and those on the black market. • Environmental impact assessments are seldom carried out before exploration for coltan begins. • Sites of historical heritage and indigenous norms are violated by artisanal miners and foreign companies. • Exploitation of children, rape and gender-based violence are common at coltan mining sites.

ENACT Africa, 2022. 20p.