BALLY’S MAIN HEADACHE ON ECONOMIC RECOVERY:
THE CASE OF MINING TARGETS AND MINERS' LABOUR ISSUES
ACCORDING to Finance Minister Situmbeko Musokotwane's public statement three weeks ago, President Hichilema’s administration aims to more than double copper output to as much as two million metric tons yearly by 2026, and ultimately about three million tons.
This is in anticipation of Government maximisation of benefit-sharing from skyrocketing copper prices currently fetching US$9, 700 per tonne and, according to Bloomberg, are expected to rise up to US$20, 000 per tonne by 2024.
To achieve the targets, on one hand, Bally's administration has promised investor-friendly policy and legislation reforms. From our 20 years’ experience since the dawn of liberalisation and privatisation, such have never been labour friendly.
On the other hand, Bally's administration has promised wide range of citizen's freedoms, including picketing. Police have been directed to cooperate with citizens excersizing their rights.
An interlude of wildcat salary strikes currently ongoing in Copperbelt and North-Western Provinces, of uniform salaries across mines in Zambia, and Congo DRC, is just a tip of the iceberg that lies ahead in the mining sector, in terms of citizens exersizing rights in that regard.
One thing for sure is that with mines in private hands, it is impossible, in a liberalised environment, to achieve uniform salaries across all mines, which the aggrieved miners are demanding.
Here are some of the reasons. First, each mine has its own unique production costs. Operational costs at KCM, for example, cannot be the same as at Kansanshi.
Second, the grade of ore at one mine is never the same at every mine in Zambia, and Congo (since the miners have included Congo in their demand).
Third, capital investment capabilities at one mine cannot be the same at all mines. Investors with higher capital investment capabilities can use this factor to play around with economies of scale to respond to higher salaries demands.
Put simply, Bally's dream for production of targetted two million to three million tonnes of copper by 2026, will be a pipedream, under the circumstances.
Meantime, we sit down, relax and wait and see what happens as Bally embarks on the journey to fix the economy, after he solemnly inherited instruments of power on August 24, 2021.