China's financial influence expands as Chinese-funded mining companies in Zambia start paying taxes in renminbi.

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Chinese mining companies in Zambia have started paying royalties and taxes in renminbi (RMB), marking a further increase in the acceptance of RMB on the African continent and highlighting China's expanding influence in Africa's financial sector.

On Wednesday the 31st, Eastern Time, according to media reports, the Bank of Zambia stated in an email reply that payments in RMB began in October. Zambia, Africa's second-largest copper producer, has become the first government on the continent to officially accept mining taxes and fees paid in RMB.

This change reflects substantial progress in the internationalization of RMB. The new payment mechanism will help Zambia diversify its foreign exchange reserves and repay its debt to China in a more cost-effective way.

Zambia’s Diversification of Reserves Drives Policy Changes; Chinese Mining Companies Increasing Investments

The Bank of Zambia said, "A large portion of copper exports go to China, and Chinese mining companies receive payments for these exports, some or even all of which are already settled in RMB." The central bank also noted that “diversifying foreign exchange reserves and increasing reserves are key goals, and purchasing RMB helps achieve this.”

Holding some RMB in its foreign exchange reserves will also allow Zambia to repay its Chinese debt more cost-effectively. The central bank first introduced rules in 2018 requiring mining companies to sell dollars to pay royalties, and extended this to all mining tax payments in 2020. Last month, the central bank began publishing the official exchange rate between RMB and the kwacha, facilitating this transition.

Mining companies can now choose to sell dollars or RMB to the Bank of Zambia for tax payments. Joseph Jalasi, senior partner at the local branch of Dentons, said, "The practical acceptance of RMB will depend on the reserve management policies of the Bank of Zambia, pricing mechanisms, and market operation guidance."

In 2024, Canadian companies First Quantum Minerals Ltd. and Barrick Mining Corp. accounted for about two-thirds of Zambia's total copper output. Meanwhile, Chinese operators such as China Nonferrous Metal Mining Group are investing billions of dollars to boost copper production. The expansion of Chinese investment coincides with a major global copper price surge in 2025. The price of London copper rose over 40% for the year, the largest annual increase since 2009.

According to Xinhua News Agency’s report on the 28th last week, Zimbabwe’s largest newspaper, The Herald, recently published an article stating that China has advantages in large-scale infrastructure construction, and China-Africa cooperation has brought infrastructure connecting regions, a stable energy system for production, and industrial capacity driving employment to Africa. The article stated that China is an indispensable strategic partner for Africa to win the future. Xinhua also quoted the following summary from the paper:

For investors, Africa not only possesses abundant mineral and energy resources underground, but also many opportunities above ground. Africa needs to build electricity systems, logistics corridors, and industrial capacity, as well as the ability to transform investment into productivity. China has an advantage in these fields, especially in large-scale infrastructure construction. Over the years, China’s investment and commitment to Africa have been proven.

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