Mining fuel costs shoot up by over 50%

Zambia’s mining sector is reeling after a dramatic surge in fuel prices, with diesel costs rising to nearly K34 per liter the most severe cost crisis in recent memory.

Mining Expert and Associate Professor at Copperbelt University’s School of Mines, Professor Peter Chileshe, has told the Zambian Business Times – ZBT, that the cost spike poses a major threat to mining operations as diesel is a critical input for mining, and such a sharp increase in price severely impacts the bottom line.

The Energy Regulation Board (ERB) recently raised fuel prices, with diesel which is vital for mining operations, seeing the most dramatic increase after pump price jumped from K23.25 per litre in March to K33.99 in May 2026, nearly doubling in just two months. Professor Chileshe, warns that the impact is already being felt as mining operations rely heavily on diesel, which makes up a significant portion of their operating costs.

 “When you see prices shoot from K23 to K35 in such a short space of time, the effect on profitability is devastating,” he told the Zambian Business Times. “When you calculate the cost in dollar terms, using an exchange rate of 18 kwacha to the dollar, diesel has risen from about $1.27 to nearly $1.94 per litre,”Professor Chileshe explained in an interview with the Zambian Business Times (ZBT). “That’s a surge of more than 50% in fuel costs in a matter of months, which is putting substantial pressure on mining companies who are the major consumer of diesel.”

“To put the cost increase in perspective, consider this: Just a few months ago, diesel was priced at K23 per litre. Using an exchange rate of 18 kwacha to the US dollar, that’s about $1.27 per litre. Now, with diesel at K35 per litre, the cost jumps to roughly $1.94 per litre. Since mining companies earn most of their revenue in US dollars (and in Chinese yuan), this escalation hits their bottom line directly.”

 He explained that in dollar terms, the price surge means diesel has gone from $1.27 to $1.94 per litre, a staggering increase of more than 50% in just three months. “Diesel is already one of the largest operational expenses for mines. A jump of this magnitude within such a short period is bound to hurt, and it’s happening fast: from March to May, diesel costs shot up by over 50%.”

 Proffesor Chileshe further warned that the challenge doesn’t end with cost. “There’s also the issue of supply. With Zambia’s Angolan refinery not yet operational, the country relies heavily on imported diesel and petrol routed through the Persian Gulf.

This means that any disruption in international supply chains could further strain the sector. In short, Zambian mines are facing a double blow: soaring costs and uncertain fuel availability.” The impact extends beyond mining.

Chileshe warned that the unpredictable and escalating fuel prices could have catastrophic effects for developing countries like Zambia. “This could lead to a recession or a downturn in economic performance globally. If the world economy slows, demand for commodities like copper will fall, further impacting Zambia’s export revenues.” Professor Chileshe concluded that the current challenges are unlikely to be short-lived: “Even if prices stabilize, we’re likely to feel these effects for six months to a year. This is a major problem for Zambia’s industrial and agricultural sectors.”

Article by Tyndale Muchiya

Zambia’s mining sector is reeling after a

Does Zambia have processing industries to promote value addition in mining?

Zambia’s mining sector continues to be the key driver of the country’s economy, dominating not only exports but also the inflow of foreign exchange into the country, as reported by the Bank of Zambia in Quarter 4 of 2025.

However, despite it being the major source of export earnings and forex inflows, many experts argue that increasing value addition in the mining sector could benefit the country more as opposed to raw exports.

Zambia Institute of Chartered Accountants President Yande S. Mwenye has noted that adding value to Zambia’s mineral resources that are exported out of the country could help increase revenue or money generation for the country.

Speaking in an exclusive interview with Zambian Business Times— ZBT, Mwenye noted that creating initiatives that will attract investors with the sole purpose of processing copper and other minerals can help achieve value addition.

“As we know, they always say when you add value to a raw product, that’s how you make the most money, and as ZICA, we are looking forward to initiatives perhaps around inviting investors into the country with the sole purpose of them coming to process minerals because exporting minerals in their raw form is good, but we can do better by processing these minerals, be it copper, gold, or any other mineral,” said Mwenye. “Years back we had the auction of emeralds in Zambia, and that provided the much-needed resources for our economy,” Mwenye She added that adding value to minerals being produced is a welcome move, and the government needs to structure policies that will attract investors into the country to process these minerals and be given more incentives.

 “ The kind of investment we need is to attract companies to come and set up processing plants in Zambia as a starting point because yes as a nation we have grown we are over 60 years old, but they are economies that have their technological know how they have deep rooted research and development in these countries and perhaps government would consider looking at policies and incentives to invite these investors to come into the country and set up processing plants to add that much need value using state of the art technologies,” said Mwenye.

She further mentioned that the geo mapping that has been going needs transparency around reports, as the country needs to know the resources that the nation holds because Zambia is a resource-rich country

Article by Justine Phiri

Zambia’s mining sector continues to be the