Profitability and Nationalisation on the Zambian Copperbelt

Abstract

This article traces the trajectory followed by Rhokana Corporation and its Nkana Mine during the first five years of Zambian independence. During the period under examination, Rhokana’s fortunes were shaped by the complex interaction of local, regional, and international dynamics. While existing studies have focussed on issues such as African Advancement, Zambianisation, the official embrace of socialism through humanism, and Southern Africa’s intensifying liberation struggle when explaining the shifting relationship between the government and the mining companies, scholars have largely overlooked the part played by taxation regimes, deteriorating underground mining conditions, and the falling grade of ore in influencing the productivity and profitability of the copper mining industry. Nor have they paid sufficient attention to the marked rise in the price of copper at this time. This paper questions arguments that the nationalisation of the mining sector in Zambia was the result of the government’s political and philosophical thinking in response to ideological change in Africa and Latin America. By contrast, it suggests that the government’s decision to nationalise the industry was largely driven by the huge profits realised by the mining companies and the record dividends distributed to shareholders abroad.