Chinese buyers of Zambian copper will start paying for some purchases in Chinese yuan from next year, Bank of Zambia Governor Denny Kalyalya said in Bangkok on the sidelines of the IMF and World Bank meetings. The shift starts with Chinese mining producers that already settle Zambian tax obligations in yuan. Zambia became the first African country to confirm accepting yuan payments after mine operators began using the currency in October last year, and the central bank has built yuan reserves of CNY 1.3 billion, about 191 million dollars.
Kalyalya also said Zambia is discussing a currency swap with China and wants future Chinese loans denominated in renminbi rather than dollars. Yuan earned from copper could then be recycled directly into debt repayments to Chinese creditors without conversion through the dollar, cutting costs and exposure to dollar shortages.
The metal itself will still be priced off dollar quoted benchmarks in London and Shanghai. What changes is invoicing and payment, handled at treasury level. The open questions are the share of exports that moves and whether other China exposed producers follow, as Zambia targets three million tonnes of copper output a year.