The Strategic Raw Material Partnership between the EU and Zambia

Ambitions and challenges of the EU’s raw material partnerships

The EU’s raw material policy has significantly gained in importance in recent years. With the Critical Raw Materials Act (CRMA) of April 2024, the EU aims to reduce depend­encies and diversify its supplies – espe­cially of the 17 raw materials identified as stra­te­gic. While the expansion of European capac­ities is under way, the implementation of international partnerships remains crucial if supply chains are to become more resilient.

So far, the EU has forged 14 raw material partnerships. In October 2023, it signed a legally non-binding memorandum of under­standing (MoU) with Zambia as well as a similar agreement with the Democratic Republic of Congo (DRC). The EU thereby signalled to mineral-rich countries of the Global South that it wants to be a reliable and long-term partner in the raw material sector. Besides securing its own supplies, the EU is seeking to promote “win-win” cooperation that will contribute to value creation in partner countries.

The partnerships are to be implemented through the “Team Europe” approach, which involves coordinated cooperation between the EU, its member states and their finan­cial institutions. The MoU with Zambia is now being put into practice. As part of the institutional process, the two sides have drawn up a joint implementation roadmap. The EU delegation to Zambia is now tasked with overseeing its execution on behalf of the Union, including the coordination of Member State contributions. The roadmap outlines measures in five areas:

• Integration of supply chains (joint ventures, industrial cooperation)

• Infrastructure financing

• Research and innovation

• Capacity building

• Sustainable and responsible sourcing

The roadmap was finalised in June 2024 but, like all such roadmaps, will not be made public. One year after the signing of the MoU, the foundation for cooperation has been laid. However, Zambia’s expectations – particularly in the area of supply chain integration – have not been met. The EU must act more quickly in order to establish itself as a credible partner in what is an increasingly competitive environment. After all, Zambia is a sought-after raw material partner. Public records indicate that at least eight bilateral declarations of intent have been concluded by the govern­ment in the last two years. With his foreign policy stance of “positive neutrality”, Presi­dent Hichilema, is pursuing a broad diver­sification strategy. Whether and to what extent these partnerships will pay off for Zambia remains to be seen. Recently, there have been two important developments.

First, neither the EU nor Zambia can regard the US as a reliable partner under the current administration in Washington. For Brussels, this is a strategic setback, as it had been counting on transatlantic coopera­tion, particularly within Mineral Security Partnership (MSP) initiated by the US in 2022. The goal of the MSP is to diversify raw material supply chains and reduce depend­ence on China through cooperation with allies. However, the results have been dis­appointing to date: only one copper explo­ration project in Zam­bia has been granted MSP status and there have been no further investments in the country. Under the “America First” policy, it is likely that the US will discontinue or at least scale back its engagement in the MSP; and the same applies to the joint financing of infrastructure in the region with the EU.

Second, China and the Gulf states are acting more swiftly and responding more directly to Zambia’s call for investment in its raw material sector. At the Forum on China-Africa Cooperation (FOCAC) 2024, Beijing pledged new multi-billion-dollar infrastructure investments. At the same time, China remains the largest buyer of Zambian copper while Chinese companies have announced investments totalling US$5 billion. For their part, the Gulf states are positioning themselves strategically. The United Arab Emirates has secured a key source of copper through the acquisition of the Mopani Copper Mines by International Resources Holdings. And Saudi Arabia is stepping up its raw material diplomacy: in January 2025, it signed an MoU with Zam­bia. Its mining investment arm, Manara Minerals, is planning to take stakes in Zam­bian mines and exploration projects.

Zambia’s ambitions: Mining to become growth engine

The Zambian government welcomes the growing geopolitical interest in its raw materials. Since taking office in 2021, Presi­dent Hichilema has been seeking to stabil­ise the economy; but despite a successful debt restructuring, the country’s finances remain strained. The mining sector is ex­pected to become Zambia’s growth engine. Indeed, it already forms the backbone of the domestic economy: in 2022, it accounted for 72 per cent of exports and 44 per cent of government revenues.

The main focus is copper production, which is already well established (see figure below). According to the government’s plan, which is being driven forward by the Ministry of Mines and Mineral Development, copper output is to increase from just over 820,000 tons in 2024 to 3 million tons by 2031; however, industry experts consider 1.5 million tons to be more realistic. At the same time, the extraction of critical raw materials is to be diversified in order to profit from global demand – especially in sectors such as the energy transition and battery production. The country’s first na­tional Critical Minerals Strategy (CRM), pres­ented in autumn 2024, is intended to make better use of what is the largely untapped potential of resources such as manganese, nickel and lithium. However, this will re­quire substantial investments in explora­tion and the development of new mines.

To attract investors, the Hichilema gov­ernment is promoting investment security and political stability. Both featured promi­nently at the “Insaka: Invest in Zambian Mining” conference, which took place for the first time in October 2024. Alongside Zambia’s reform plans, a new exploration programme was presented, to be carried out by Spanish firm Xcalibur and financed with US$98 million from the national budget.

To support the planned expansion of the mining sector, Zambia must also invest in infrastructure, particularly in the energy sector. More than 80 per cent of the coun­try’s electricity comes from hydropower, which means the energy supply is vulner­able to droughts. In fact, this is currently the case, with mining and copper process­ing significantly affected. Nonetheless, primary processing of ore continues to take place inside the country: in 2023, besides approximately 737,000 tons of copper, Zam­bia produced 637,000 tons of anodes (im­pure copper) and 199,000 tons of cathodes (high-purity copper). While energy supply is now being stabilised through imports, coal and solar energy are expected to ensure increased stability in the future.

Furthermore, Transport infrastructure is becoming another strategic focus. Zambia has secured support for two major railway projects: the modernisation of the TAZARA railway line to Tanzania (with backing from China) and the Zambian link to the Lobito Corridor, which is planned to enhance con­nectivity to Angola and the DRC (US and EU).

EU-Zambia cooperation: An incomplete partnership

Zambia has precisely what Europe is strate­gically seeking in raw material partners – namely, critical raw materials, a democratic system and political stability. The 2023 MoU laid the groundwork; now, more rapid progress is needed. In today`s competitive environment, the EU must further develop its partnership with Zambia. Two factors complicate this effort.

First, there is a lack of strategic coherence within the “Team Europe” framework. While smaller member states such as Fin­land and Sweden are playing an active role, economically stronger countries like France and Germany are holding back. Moreover, coordination between Brussels, member states and EU delegations on the ground is time-consuming and frequently unfocused. This institutional fragmentation makes it hard for Zambia to grasp how the EU oper­ates; and at the same time, it is obstructing intra-European synergies that could ad­vance cooperation.

Second, the dearth of EU industrial projects could increasingly work against the Union in the race for partnerships. China and the Gulf states are directly addressing the typi­cally high investment needs of in countries of the Global South and thereby positioning themselves as attractive partners. The EU, on the other hand, is currently more focused on promoting its own industries and, as a result, is missing the opportunity to involve resource-rich countries like Zambia. If it is unable to make up for lost ground, it risks losing credibility and entering into partner­ships that have a limited impact.

Momentum towards strengthening the raw material partnership

Zambia is currently at the centre of inter­national raw material diplomacy. The risk is that issues such as good governance and socio-ecological sustainability will be side­lined in favour of economic gain. However, severe environmental damage and demands from local stakeholders are ensuring that sus­tainable value creation – which is urgently needed in the country – remains an integral part of the debate. It is in this area in particular that the EU remains a reli­able partner for Zambia. Through the signing of the 2023 MoU and the establishment of technical cooperation, the EU has laid a solid foundation for the partnership. And if there were to be tangible progress towards industrial cooperation, it could consolidate its position in Zambia and fur­ther diversify its own raw material supply.

For that to happen, stronger European coordination is essential. The newly created coordi­nator role within the EU delegation to Zam­bia is a first step but not enough in itself. The “Team Europe” approach must be put into practice: major European industrial nations, including Germany, should be­come more involved on the ground and, together, with the EU Commission, pursue a coherent strategy. Moreover, the EU should credibly signal that industrial cooperation is desired and a core component of its raw material strategy. Currently, its priority is to expand and protect its own industry, while increas­ingly neglecting international partnerships.

A clear sign that the EU is seriously com­mitted to the partnerships in the region would be targeted support for industrial coopera­tion. An industrial policy initiative could incentivise European companies and thus have an impact in Zambia. The EU should more proactively seek to involve European companies in processing and downstream supply chains – for example, in battery materials or recycling. This would require the establishment of the appropriate frame­work conditions: targeted incentives and fund­ing structures as well as reliable financing. The raw material strategy of the European In­vest­ment Bank and the financing instruments of Germany’s development bank, KfW, need to be better tailored to the require­ments of both the raw material sector and developing countries like Zambia. Equally crucial are institutional structures on the ground. A more prominent role for the German Chambers of Commerce Abroad and dedicated contact persons for Zambia from the consortium EIT RawMaterials could help facilitate market entry.

The EU should make better strategic use of its unique selling point – namely, technical co­opera­tion. A central fund, easily accessible via the EU delegation to Zambia, would be a novel tool that could accelerate the imple­mentation of technical cooperation. More­over, the EU should step up its support in two areas that are essential for industrial cooperation: governance – for example, through support for the new Minerals Regu­lation Commission and state-owned com­panies in the raw material sector; and indus­trial policy planning, which could meaningfully supplement existing pro­grammes such as that of the World Bank. Germany could make a contribution here through the Deutsche Gesellschaft für Inter­nationale Zusammenarbeit (GIZ) and the Federal Institute for Geosciences and Natural Resources. This would allow the new coalition government in Germany to underscore its political commitment to the EU’s raw material strategy and fulfil the pledge in the coalition agreement to forge “partnerships on an equal footing”.