The Relationship between Value Addition and Profitability in Zambia's Copper Mining Sector

Zambia remains a major copper producer, yet domestic participation is concentrated in extraction, concentration and cathode production rather than downstream beneficiation. This study examined the relationship between value addition and profitability in Zambia's copper mining sector. A positivist, longitudinal quantitative design was applied to ten annual observations for 2015-2024. Descriptive statistics, Pearson correlation and bivariate ordinary least squares regression were used. Estimated value addition increased from 18% to 27%, while estimated profit margin rose from 14.2% to 18.1%. Value addition was positively correlated with profit margin (r = 0.710, p = 0.021), and the regression explained 50.4% of margin variation. A one-percentage-point increase in value addition was associated with a 0.293-percentage-point increase in profit margin. The findings support selective downstream processing, provided Zambia strengthens electricity reliability, infrastructure, policy stability, industrial finance and market linkages.

copper mining; value addition; profitability; mineral beneficiation

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