Zambia threatens mine’s licence
CNMC told not to halt production
ZAMBIA, Africa’s secondbiggest copper producer, would suspend the mining licence of CNMC Luanshya Copper Mines if the company did not reverse a decision to halt production at one of its biggest mines, information minister Chishimba Kambwili said.
“We have options that we can take as government and one of the options is to suspend their mining licence,” he said in an interview. “If they don’t follow the procedure there are options for government to invoke. We shall invoke the provisions of the law and suspend their entire mining operation.”
Low prices
CNMC, owned by China Nonferrous Metals Company, said last week Monday it would place its Baluba mine under care and maintenance from the next day because of higher costs, lower copper prices and a power shortage. It sent more than 1 600 workers on leave.
Kambwili the company did not follow procedures and acted “illegally”.
A spokesman for CNMC Luanshya declined to comment.
Mines in Zambia face copper prices that fell this year to the lowest levels since 2009 as economic growth slows in China, the biggest consumer of the metal. Zambia also has a power deficit amid falling water levels in the hydropower stations it relies on for nearly all electricity generation.
Glencore’s Zambian unit Mopani Copper Mines (MCM) was planning to cut 4 300 jobs due to lower metal prices and high production costs, a union and company sources said yesterday.
“We are not agreeable to the job cuts. We are therefore re- questing for continued dialogue,” said James Chansa, president of Zambia's National Union for Miners and Allied Workers.
MCM will give the government 60 days notice before implementing any job cuts. MCM officials were not immediately available to comment.
A source at MCM said management proposed to cut 4 300 of the estimated 10 000 direct jobs and reduce production by 50 percent instead of suspending all output for 18 months.
“It is inevitable that jobs have to be lost. However, the unions opposed the proposal so we asked them to tell us what to do to keep all the jobs,” said the source.
A second source said more than 4 300 jobs would have been lost under Glencore's plan to suspend production for 18 months.
“We had to plead with Glencore to come up with this,” he said. The production halts at Mopani and Baluba would cut economic growth, export proceeds and royalties, Moody’s analyst Zuzana Brixiova said.
That would weigh on Zambia’s “increasingly precarious fiscal and external positions”, she said. – Bloomberg With additional reporting by Reuters