GLENCORE’S TREACHERY

THERE is nothing new that can surprise us about the modus operandi of Glencore International in relation to Mopani Copper Mines.

Thus the disclosure by Ministry of Mines and Mineral Development Permanent Secretary, Barnaby Mulenga that Glencore inflated the costs of procurement, goods and services as well as how much was paid to expatriates at the Mopani Copper Mines does not come as a surprise.

Mr Mulenga, speaking on ZNBC Sunday Interview, said a detailed report conducted around May up to end of July 2020 revealed and proved that the provision of goods and services among others were inflated.

He said the detailed investigation of Mopani involved the Zambia Revenue Authority, Ministry of Finance, Ministry of Mines and Ministry of Labour to check what was happening exactly at the mine when Glenore indicated that they were pulling out.

Mr Mulenga said it was surprising that at the time when the investigation was being done, a tonne of copper was about US$8, 000 and yet Mopani claimed that it was mining at a loss.

He said some exaggerations regarding the costs of expatriates and the way procurement was being done were detected.

From the time that Glencore International acquired the mines, it has been tale after tale of complaints regarding its operations.

The situation reached a point whereby its workforce even lost their security of tenure regarding their employment.

This was after the mining firm decided to put its mines on care and maintenance, threatening to offload thousands of workers on the streets.

It had to take Government intervention to make the mining firm rescind its decision. But even then, it said the decision would be subject to review after six months.

Thankfully about a week ago, Glencore agreed the sale of its majority stake in Mopani Copper Mines to Zambia’s mining investment arm ZCCM-IH in a US$1.5 billion deal.

ZCCM-IH already holds the remaining 10 percent stake in Mopani and is acquiring the outstanding interest from Carlisla the transaction debt of $1.5bn, which will remain owed by Mopani to Carlisla and other Glencore group creditors following the completion of the deal.

It is a pity that the mining companies have been associated with all manner of shady business dealings – from cheating on the value of the minerals exported, insider trading to outright dodging tax.

A damning study last year revealed that as Zambia struggles with debt, billions of dollars are being siphoned out of the country by large mining companies in unreported profit remittances.

The study, by the Developing Economics titled Haemorrhaging Zambia: ‘Prequel to the Current Debt Crisis’ stated that massive outflows of private wealth over the past 15 years, reached peaks of almost 20 percent of GDP in 2012, and over seven percent as recently as 2017.

It stated that the outflows were mostly related to the large mining companies that dominate the country’s international trade.

“Through this analysis, we have identified massive outflows of private wealth over the past fifteen years, reaching peaks of almost 20 percent of GDP in 2012, 15 percent of GDP in 2015, and over seven percent of GDP as recently as 2017, said the report.

This unfortunately, is not the first time that misdeeds by the mining companies are coming out.

It is an established fact, proved in the country’s highest court – Supreme Court – that some mining firms have been playing double standards in their dealings with the Zambia Revenue Authority.

Their treachery came out in the open when the Supreme Court charged Mopani Copper Mines US$13 million after it established that the firm colluded with its parent company Glencore International AG to undervalue the price of copper.

So when some Zambians criticise the Mopani deal, whose interests are they protecting, safeguarding the future of miners or allowing the status quo – outright stealing – to continue?