A LEGALLY registered mining company in the country has been named in a complex and controversial copper supply chain involving unlicensed mining, illicit smelting and the externalisation of funds to offshore accounts.
The Financial Intelligence Centre (FIC)s latest report reveals that the firm, referred to as Mine P, purchased copper concentrate from Company Y, a business operated by Asian nationals with no legal mining mandate and linked to a suspected illegal smelter.
Company Y, which was incorporated in 2020 for wholesale trade, entered into an agreement with Cooperative R, a Zambian-owned entity that was illegally mining copper ore from a disused mining dump known as Dump Z, without valid permits.
The extracted ore was then sold to Company Y, which processed it at an illegal smelting facility, known as Smelter T.
According to the FIC, Company Y paid K1 million in cash to Cooperative R to avoid financial scrutiny.
The processed copper was subsequently sold to Mine P, which paid over US$2 million to Company Y for the concentrate.
Financial analysis also shows that over US$1.5 million of the proceeds were moved to offshore bank accounts in Asia, prompting the FIC to raise red flags about money laundering, tax evasion and possible violations of the Mines and Minerals Act.
“The case was disseminated to LEAs on suspected tax evasion and money laundering. The case was under investigations,” stated the report.
While the identity of Mine P has not been disclosed, the firm is described as an established mining company operating legally in Zambia.
The FIC report also underscores systemic weaknesses in Zambia’s mining and financial regulatory framework including the ease with which foreign national establish companies and operate outside their stated business purpose.
The report highlights porous enforcement of licensing and environmental regulations as part of the problem and limited oversight of cash based transactions and cross border money flows.
By Catherine Pule
Kalemba, July 28, 2025
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