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SI 68 of 2025 Zambia has changed who can compete for a significant share of mining procurement in the country. From 1 January 2026, mining and mining-related companies became subject to new local-content rules covering procurement thresholds, Zambian ownership, tender preferences, supplier development, reporting and exclusively reserved non-core contracts.
For Zambian businesses, this creates a major route into the mining value chain. For mining houses and mineral processors, it creates a compliance obligation that procurement teams can no longer treat as voluntary corporate policy.
The key point is that SI 68 is not simply encouraging mines to “buy Zambian”. It creates measurable legal requirements.
Key Takeaways
- SI 68 of 2025 took effect on 1 January 2026 and applies to procurement by mining companies and mining-related companies involved in the minerals value chain.
- For core mining goods and services, at least 20% of annual procurement must initially be reserved for qualifying local companies, rising to 25%, 35% and ultimately at least 40%.
- A local company under the regulations means a citizen-empowered or citizen-owned company. Government implementation guidance puts the minimum qualifying Zambian shareholding at 25%.
- Critical non-core mining goods and services are exclusively reserved for local companies, including categories such as security, catering, logistics, ICT, financial services, labour hire and training.
- Local companies receive a 15% margin of preference when technically compliant bids for core mining goods or services are evaluated.
- Mining companies must implement Supplier Development Programmes, including a minimum annual investment commitment equal to 0.05% of annual procurement expenditure.
- Non-compliance can expose companies, and in certain circumstances directors or managers, to substantial penalties.
What is SI 68 of 2025 Zambia and who does it apply to?
SI 68 of 2025 is the Geological and Minerals Development (Local Content) (Preference for Goods and Services in the Mining Sector) Regulations, 2025. It was made under sections 10(4) and 19 of the Geological and Minerals Development Act, 2025 and became operational on 1 January 2026.
The regulations cover procurement by both mining companies and mining-related companies.
This is wider than simply the company physically extracting copper from the ground.
Under the regulations, a mining-related company includes a business involved in the minerals value chain. Government guidance gives examples such as smelting and refining copper, producing copper-based products and recovering minerals such as cobalt, gold and silver during processing.
The rules apply to four broad procurement categories:
| Procurement category | SI 68 treatment |
|---|---|
| Core mining goods | Progressive local procurement threshold |
| Core mining services | Progressive local procurement threshold |
| Non-core mining goods critical to operations | Exclusively reserved for local companies |
| Non-core mining services critical to operations | Exclusively reserved for local companies |
This distinction matters because the rules are not identical across every contract.
A mine buying drilling equipment is dealing with a different local-content requirement from a mine procuring security or catering services.
That is why both suppliers and procurement departments must first classify the contract correctly.
How much mining procurement must go to local companies?
Mining and mining-related companies must progressively reserve part of their annual procurement budgets for local companies supplying core mining goods and services. The threshold starts at 20% and rises to at least 40% within five years.
The statutory progression is:
| Period from commencement | Minimum reserved procurement |
|---|---|
| Within 6 months | 20% |
| Within 1 year | 25% |
| Within 2 years | 35% |
| Within 5 years | Not less than 40% |
The regulations took effect on 1 January 2026. Government implementation guidance therefore required mining companies to reach the initial 20% stage within the first six months of implementation.
As of August 2026, that initial implementation period has already passed.
There is another important provision that smaller suppliers should understand.
If one local company cannot supply enough goods or services to meet the reserved threshold, the mining company is required to subdivide the contract into smaller lots so that several local companies can participate.
That is commercially significant.
Historically, a Zambian SME might have been excluded because a contract was simply too large. SI 68 pushes mines to consider whether a large requirement can instead be split across several qualifying suppliers.
There is an exception where core mining goods or services are procured directly from an Original Equipment Manufacturer, or OEM. The contract-splitting requirement does not apply in that situation.
What counts as a local company under SI 68?
A PACRA-registered company is not automatically a “local company” for SI 68 purposes. The regulations define a local company as a citizen-empowered company or citizen-owned company, using the classifications established under Zambia’s Citizens Economic Empowerment framework.
Government’s implementation guidance explains the practical threshold as follows:
- A citizen-empowered company generally has 25% to 50% Zambian citizen ownership.
- A citizen-owned company has at least 50.1% citizen ownership, together with significant citizen control of management.
- The minimum entry point for SI 68 preference is therefore 25% Zambian citizen shareholding.
This distinction is one of the most important parts of the regulations.
Suppose a South African engineering business incorporates:
ABC Engineering Zambia Limited
It registers at PACRA, obtains a TPIN, rents an office in Kitwe and employs Zambian staff.
However, the shares remain 100% foreign-owned.
That business may be locally registered, but it does not automatically qualify as a local company under SI 68 merely because it operates in Zambia.
The ownership structure matters.
That creates a strategic question for foreign mining suppliers. They can remain foreign-controlled and compete where the regulations allow it, or they can consider a genuine citizen-empowered structure or commercial partnership.
What should not be done is to appoint a Zambian shareholder purely on paper while the real economic ownership remains elsewhere. SI 68’s reporting framework includes supplier beneficial ownership disclosures, which makes ownership verification part of compliance rather than a box-ticking exercise.
If your company wants to supply Zambia’s mines but you are unsure whether the existing shareholding structure qualifies under SI 68, book a mining supplier compliance review with M&J Consultants. We review the ownership, statutory records and target procurement category before you restructure or start chasing tenders.
Which goods and services are reserved for local suppliers?
SI 68 creates two very different opportunities. Core mining procurement is subject to progressive local thresholds, while critical non-core mining goods and services are exclusively reserved for local companies.
The First Schedule includes core mining goods such as mining machinery and spare parts, safety equipment, fuels and lubricants, cement, lime, pumps, electrical equipment, drilling equipment, mill components, chemicals and other specialised mining inputs.
Core mining services include:
- metal fabrication;
- drilling and blasting;
- mine development;
- shaft sinking;
- wastewater treatment;
- dewatering;
- engineering services;
- geological and geotechnical services; and
- consultancy connected to core mining goods and services.
The Second Schedule is where the opportunity becomes much broader.
Examples of non-core mining goods include furniture, uniforms, food, medicines, stationery, cleaning materials, safety wear, office equipment and catering-related goods.
Non-core mining services listed in the regulations include:
| Area | Examples |
|---|---|
| Security | Security and patrol services |
| Hospitality | Catering, accommodation and camp management |
| Transport | Personnel transportation, haulage and bulk transport |
| Logistics | Freight forwarding, warehousing and storage |
| Facilities | Cleaning, laundry, plumbing and maintenance |
| ICT | Information systems, IT and communication services |
| Professional services | Legal and financial services |
| Human resources | Specialised and non-specialised labour hire |
| Training | Capacity building and training services |
| Consulting | Non-core consultancy and CSR services |
This is why SI 68 should matter to businesses well outside traditional mining engineering.
An accounting firm can be part of the mining supply chain.
So can an ICT company.
So can a security business, transporter, training company, accommodation provider or recruitment firm.
You do not need to manufacture drill bits to participate in mining procurement.
How does the 15% margin of preference work?
For technically compliant bids involving core mining goods and services, mines must apply a 15% margin of preference to a qualifying local company’s bid during evaluation. This is an evaluation advantage, not a compulsory discount from the supplier’s invoice.
Consider this example.
A mine receives two bids for technically compliant core equipment:
| Bidder | Actual tender price | Evaluated price after local preference |
|---|---|---|
| Foreign supplier | ZMW 1,000,000 | ZMW 1,000,000 |
| Qualifying local supplier | ZMW 1,100,000 | ZMW 935,000 |
Applying the 15% preference to the local company’s ZMW 1,100,000 bid reduces its price to ZMW 935,000 for evaluation purposes.
If it wins, the company still invoices its actual tender price of ZMW 1,100,000.
The preference does not mean the supplier sacrifices 15% of its revenue.
But there is an important limit.
Local ownership does not excuse poor quality.
Government guidance expressly states that the margin of preference applies only where the bid is technically compliant and meets the required quality, safety and certification standards. A sub-standard offer does not become acceptable simply because the shareholder structure qualifies.
That is an important reality for Zambian SMEs.
SI 68 creates access. It does not replace competence.
Businesses still need certifications, working capital, HSE systems, technical staff, references and the capacity to deliver.
What must mines do on supplier development and reporting?
SI 68 requires mining companies to do more than redirect procurement. They must actively develop local supplier capacity and maintain evidence showing how local-content obligations are being implemented.
Supplier Development Programmes are mandatory.
Government guidance required mining and mining-related companies to develop and submit these programmes within six months of SI 68’s commencement, with 30 June 2026 identified as the implementation deadline.
The Fourth Schedule requires programmes to cover areas including:
- supplier capacity assessments;
- technical and business skills training;
- quality and certification support;
- health, safety and environmental training;
- technology transfer;
- access to commercial finance;
- working-capital support;
- technical mentoring;
- measurable targets and timelines; and
- monitoring and evaluation.
Most importantly, the programme must provide for a minimum annual investment commitment of 0.05% of annual procurement expenditure toward supplier development.
For Zambian SMEs, this means the opportunity goes beyond bidding.
Mines are expected to participate in building the capability of the supplier ecosystem.
There are also extensive transparency requirements.
Mining and mining-related companies must maintain records of local supplier participation and incorporate local procurement into their annual procurement plans. Those plans and tenders must also be published through the mechanisms provided in the regulations.
Where core procurement has to be allocated to non-local suppliers because qualifying local suppliers cannot meet the required threshold, quarterly submissions must include information covering procurement, employment, supplier beneficial ownership and Supplier Development Programme performance.
This means procurement compliance increasingly becomes a data problem.
A mining company should be able to answer:
Who owns this supplier?
Is the contract core or non-core?
How much have we spent with qualifying local companies?
Was the 15% preference applied?
Why was a foreign supplier selected?
Was contract subdivision considered?
What supplier-development support was provided?
If those answers cannot be reconstructed from the procurement system, compliance risk increases.
What are the penalties, exceptions and practical next steps?
SI 68 carries enforceable penalties, and authorised officers may inspect mining and mining-related company premises to check compliance. The regulations also allow personal liability in specified circumstances where directors, managers, shareholders or partners knowingly participate in an offence.
The general penalty is stated as at least one million penalty units, plus another 150,000 penalty units for each day a continuing offence persists.
Zambia’s penalty-unit value was increased to ZMW 0.40 in 2024 and remained the basis used in current government reporting in 2026. That converts the SI 68 general penalty to at least:
- ZMW 400,000 initial fine, and
- ZMW 60,000 for each additional day the offence continues.
Does SI 68 shut foreign suppliers out of Zambia’s mines?
No.
That interpretation goes too far.
For core mining goods and services, foreign suppliers can still participate. Where local suppliers cannot meet the statutory threshold even after a contract has been subdivided, the remaining portion may be awarded to a company that is not local. Direct OEM procurement also receives specific treatment under the contract-subdivision rule.
The position is much stricter for critical non-core goods and services, which Regulation 6 reserves exclusively for local companies.
The smart response for a foreign supplier is therefore not panic.
It is classification and strategy.
Determine what you sell.
Determine which Schedule it falls under.
Determine whether your current ownership qualifies.
Determine whether localisation, partnership or direct foreign participation is commercially appropriate.
For Zambian businesses, the practical path is just as clear.
Make sure your ownership is genuine and properly recorded. Get your PACRA and tax position clean. Identify the exact goods or services you can supply. Build your mine vendor pack. Meet industry standards. Get onto vendor databases. Follow published procurement opportunities. And make sure you have enough working capital to execute the contract if you actually win it. Government implementation guidance similarly identifies registration, qualifying ownership, vendor prequalification and industry certification as central steps for suppliers.
Conclusion
SI 68 of 2025 is one of the most important changes to Zambia’s mining supply chain in years.
It moves local content from aspiration to measurable procurement rules.
Core mining procurement must progressively shift toward qualifying local suppliers. Critical non-core opportunities are reserved for local companies. Local bidders receive a 15% evaluation preference on qualifying core tenders. Mines must invest in supplier development, disclose procurement information and maintain evidence of compliance.
But the regulation does not guarantee success to every Zambian company.
The businesses that benefit will be the ones that combine qualifying ownership with capability, financing, certifications and professional execution.
If you want to position your company to supply Zambia’s mines under SI 68, book a mining supplier readiness review with M&J Consultants. We assess your ownership structure, compliance documents, supplier category and vendor readiness, then show you what needs to be fixed before you approach the mines.
Frequently Asked Questions
When did SI 68 of 2025 come into effect in Zambia?
SI 68 of 2025 came into operation on 1 January 2026. It regulates local-content procurement for core and non-core mining goods and services purchased by mining companies and mining-related companies operating within Zambia’s minerals value chain.
How much Zambian ownership is required under SI 68?
Government implementation guidance states that the minimum threshold for a company to qualify as local under SI 68 is 25% Zambian citizen shareholding. The regulations themselves define a local company as a citizen-empowered or citizen-owned company.
What percentage of mining procurement must go to local companies?
For core mining goods and services, the minimum starts at 20% within six months, increases to 25% within one year, 35% within two years and reaches at least 40% within five years of commencement.
Does SI 68 apply to security and catering companies?
Yes. Security and patrol services and catering services appear among the non-core mining services listed in the Second Schedule. Where those non-core services are critical to mining operations, procurement is exclusively reserved for qualifying local companies.
Can a foreign-owned company still supply mines in Zambia?
Yes, particularly in core mining procurement. SI 68 allows remaining core procurement to go to non-local suppliers where local companies cannot meet the required threshold after the prescribed process. The regulations also recognise direct Original Equipment Manufacturer procurement in relation to contract subdivision.
Is the 15% preference a discount that local suppliers must give?
No. The 15% margin is applied during bid evaluation. Government’s own example shows that the local supplier is still paid its actual contract price. The preference improves the evaluated price for comparison purposes, provided the bid is technically compliant.