By: Reuters

Zambia's state investment firm ZCCM-IH said on Monday it had formed a joint venture with Mining Mineral Resources to explore for and mine gold, as the copper-producing African country seeks to diversify its mining sector.

Kyalo Goldfields Limited (KGL) was incorporated on May 6 to explore, develop and mine gold resources in the Kikonge Mining Area in Zambia's North Western Province, ZCCM Investments Holdings said in a statement.

It said KGL will support the formalisation of artisanal and small-scale mining activities in the area to ensure the safe and regulated production of gold. It will also develop processing capabilities to enhance value retention within Zambia.

ZCCM-IH will hold a 51% stake in KGL, with Mining Mineral Resources, which mines and processes tin, tantalum and tungsten in the Democratic Republic of Congo, holding the remainder.

"Kikonge is a meaningful step in broadening ZCCM-IH's diversified minerals portfolio and represents tangible progress in delivering on our mandate to formalise and develop Zambia's gold sector," ZCCM-IH CEO Kakenenwa Muyangwa said.

KGL's operations will initially be funded through shareholder contributions, with additional structures considered as it advances, ZCCM-IH said, adding that it was preparing the detailed project scope and budget for the proposed project.

"Upon completion of this process, the company will have clarity on the investment amount," it said.

(Reporting by Olivia Kumwenda-Mtambo; Editing by Alexander Smith)