Heatmap of Artisanal Mining

Review By Tshepo Magagane

Heatmap of artisanal mining – we need to find financing solutions to formalise this key sector!

NB: since then, I have come across more info that the production is higher!!

After Insaka in Lusaka last year, I wrote the below – this is an opportunity for capital to make financial returns and have outsized social impact:

[USD6bn Artisanal Mining valuation for Zambia: NB – this is just for Copper!

* Production – 10,000t pm

* Discount to LME = 20-30%

* Cost structure = % of Zambian BFS

* EBITDA or NI = USD600m (likely far higher – these guys cost structure is their “own bodies”)

* PER = 10x or do an NAV

* Valuation = USD6bn

So they can capitalise an SPV (cooperative) at let us say 50% LTV

* So if matched, they should be able to attract USD3bn

* Zambia banking system can at most support the entire mining sector with a max of USD275m (capitalisation at 25%)

PS: have attached another chart for reported / formal gemstones (there is so much outside this formal / reported)…

…I am not even touching on other minerals here – eg gold, manganese, et al

Innovative financing solutions – they start here!!]