The Industrial Development Corporation of Zambia Ltd. (Indeco) attempted to energize the Northern Rhodesia’s industry, which lagged behind that of neighbouring southern Rhodesia. With only limited success, Indeco vacillated between state and private control. It finally re-emerged as a state-owned company in August 1964. That momentous event, on October 24, brought to power nationalist leader Kenneth D. Kaunda. Facing enormous disparities of wealth, owing to the amassing of fortune by a small minority of white settlers who exploited the country’s rich mineral resources, Kaunda set about transforming the economy. In keeping with his socialist philosophy of “humanism,” wealth generated by industry and mining was to be used for the nation’s overall development. Indeco was to be the vehicle for accomplishing this.
The plan got off to a slow start. Kaunda allowed Indeco’s management, comprising conservative white bureaucrats, to remain unchanged. The company’s industrial profile remained static. However, dramatic changes took place in June 1965, when Kaunda appointed Greek businessman Andrew Sardanis chairman and chief executive of Indeco. Sardanis, who became a Zambian citizen at the country’s independence, was one of the few white settlers to have actively supported the black liberation movement.
As head of Indeco, Sardanis attempted to launch new ventures and encourage foreign investment. But he found that foreign companies, fearing political instability and restrictions on profit, were wary of investing in a socialist African nation.
Kaunda gave Indeco a major boost in 1968 with the Mulungushi reforms, under which the government manipulated 25 leading companies into selling it 51% of their shares. Indeco absorbed the government’s investment in those companies, which fell into four main categories: department stores, breweries, transport companies, and suppliers of building materials. These same reforms made it illegal for non-Zambian citizens to trade outside the city centers, forcing hundreds of Indian residents to sell or shut their rural-based businesses.
A second batch of reforms in 1969 extended state interests into the giant copper mining industry and led to the creation of Zimco. Under the Matero Reforms, under which Zambia’s mines were partly nationalized, the government bought a controlling interest in the two largest mining concerns, one owned by Anglo American Corporation (Anglo) and the other by Roan Selection Trust Ltd. (RST), then a subsidiary of AMAX of the United States. ITM International, a company founded by Sardanis, has since acquired RST. The government subsequently reorganized the companies under the new names of Nchanga Consolidated Copper Mines (NCCM) and Roan Consolidated Mines Ltd, (RCM).
Now, for the first time since white colonials in the 1920s began mining the copper belt stretching along Zambia’s northern border, the majority of the country’s population was to benefit from its most lucrative industry. Moreover, the government’s move came during a record year for copper production, in which 12% of the worlds’s copper—more than 700,000 tons—came from Zambia, making it the third-largest producer.
A new company, the Mining Development Corporation (Mindeco), sprang up to manage the state’s mining investments. With two major holding companies, Indeco and Mindeco, the government wanted to put an overall holding company in charge. Zimco was created to fulfill that function. As the government expanded into even more industries, it created new sub-holding companies to manage related businesses, all under the authority of Zimco.