ZCCM-IH Records US$110 Million Revenue from Kansanshi Royalty Agreement
ZCCM‑Investments Holdings (ZCCM-IH) has earned more than US$110 million in royalty revenue from Kansanshi Mining Plc between 2022 and 2024 following a strategic shift from dividend-based earnings to a royalty income model.
According to the latest edition of Mining Corner 360 published by ZCCM-IH, the company secured US$110.64 million after converting its dividend rights into a 3.1 per cent gross revenue royalty from the Kansanshi mine in 2021.
The move marked a major departure from the previous equity-only structure, under which returns depended on dividends declared by the mining company.
Financial data in the report shows that ZCCM-IH earned US$17.66 million in 2022, US$38.48 million in 2023, and US$54.51 million in 2024, bringing the three-year total to US$110.64 million.
The report notes that the change has already proven beneficial, particularly as Kansanshi declared dividends only in 2022, paying US$59.6 million, and did not declare any dividends in 2023 and 2024.
Under the previous arrangement, ZCCM-IH would not have received income during those years. However, because royalties are calculated on sales revenue rather than profits, the company continued receiving regular payments.
Unlike dividends, which depend on company profits and decisions taken by the board, royalties are based on the total revenue generated from minerals extracted within the mining licence area.
The royalty is paid quarterly and will remain in place for the entire life of the mine, which is currently projected to operate until 2045.
ZCCM-IH said the royalty-based system offers greater predictability and reduced financial risk, particularly in the mining industry where operational costs and fluctuating commodity prices can significantly affect profits.
The report further shows that between 2012 and 2021, ZCCM-IH received a total of US$244.25 million in dividends from Kansanshi, highlighting how profit-based payments can vary depending on market conditions.
Analysis contained in the publication indicates that dividend income over that period averaged about US$24 million per year, while the royalty model would have generated around US$48 million annually, making it both more stable and more lucrative.
The company also benefits from favourable global metal prices under the royalty arrangement, as payments increase when revenue rises due to stronger commodity prices on international markets such as the London Metal Exchange and the London Bullion Market Association.
ZCCM-IH expects earnings from the mine to grow further following the commissioning of the S3 Expansion Project at Kansanshi in August 2025, which aims to increase production capacity even as the mine manages declining ore grades.
The company said the shift to the royalty-based model has strengthened its financial position by creating more stable cash flows, enabling it to support new investments in Zambia’s gold subsector and the broader mining value chain in Zambia.
