Glencore draws Zambia’s ire
Glencore’s Mopani Copper Mines in Zambia will be temporarily closed amid a challenging operating environment, a low copper price and the effects of the Covid-19 pandemic.
Glencore’s Mopani Copper Mines in Zambia will be temporarily closed amid a challenging operating environment, a low copper price and effects of the Covid-19 pandemic.
The pandemic has disrupted industries around the world as governments implement drastic measures to curb the rapid spread of the virus.
“The operating, regulatory and macroeconomic environments remain very challenging and have continued to place significant pressure on the business,” Mopani said on Tuesday.
Glencore, a global mining and trading group, owns 73%.
“In addition to the … rapid decline in the copper price, Mopani’s situation has been further impacted by the critical disruptions to international mobility, transportation and supply chains arising from Covid-19.”
Mopani said key personnel were unable to travel to site and a number of projects have been placed on hold.
“In the circumstances, and following consultation with its majority shareholder and funder, Mopani can no longer continue operating its mining operations and will transition those mining operations to care and maintenance with effect from April. 8”
According to international news agencies Bloomberg and Reuters, Zambian mines minister Richard Musukwa said in a state television broadcast that the company has declared force majeure and planned to close operations for three months, but he said it has failed to provide evidence of what had triggered this common contractual clause.
He reportedly said he rejected plans to lay off thousands of workers, adding, “we cannot have a multinational company that can dictate to a legitimate government. Mopani Copper Mines and its parent, Glencore, must obey the Zambian law.”
However, Mopani said its 5,000 permanent Zambian employees, excluding management, will be sent home on their base salary. About 9,000 unionised contractor employees will receive an ex gratia payment. Employees and their dependants will continue to receive health care and Mopani remains committed to its social responsibility projects.
The company said it would speak to the government and unions about that support.
“Mopani believes that the transition to care and maintenance will help protect the company’s value and preserve the option to deliver our growth projects when market conditions improve.”