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Monday, 24 November 2008

Saving mining jobs?

Interesting report in the Times that Government plans to engage managements of the mining companies and the unions to chart the way forward on the "pending retrenchments" in the mining sector following the falling of copper prices on the world market. Not waiting to see which way the copper price wind may blow next, National Union of Miners and Allied Workers (NUMAW) is already flexing the muscles :

"National Union of Miners and Allied Workers (NUMAW) president, Sikufele Mundia said the unions were still discussing with managements of the mining companies and the Government to find a solution that would prevent job cuts.
Mr Mundia said in a separate interview that even if the copper prices on the world market were falling, there was need to ensure that miners were not laid off. He said the union would not accept the notion of retrenchments and called on the mining companies to find another solution to sustaining the mines in the light of the falling copper prices.
Are we trying to save jobs or are we trying to save mining jobs ? Mr Mundia certainly is only interested in the latter. Unfortunately, Zambia has used that route before - its called a "Development Agreement". A side deal with the mining companies in exchange for "keeping the mines alive". We have been there before, and those mistakes must never be repeated. We need to realise that job creation centred around mining may not be sustainable in the long term. Its what happens when your growth strategy revolves around large tax breaks to foreign investors. When the storm comes, you only have unemployment stats to show for it. Or worse, you dig yourselves in deeper holes with more tax agreements that are too incomprehensible to the average politician.


  1. At the present time everyone must be realistic. No one wants mine workers to be laid off. Low copper prices may make lay-0ffs unavoidable.However, governments in other countries are doing their best to preserve jobs, when that is practicable, and Zambia should too. What is practicable for the mining industry? A temporary reduction in taxes until prices rise again to a stipulated level could help. If the mines are not making profits it does not help to suspend Company Tax. But it would be reasonable to suspend, or at least reduce, mineral royalty.

  2. Cho,

    We need to realise that job creation centred around mining may not be sustainable in the long term.

    I would say that 'job creation' only became the objective of the MMD government because they could not point at any economic benefit from giving away the mines to 'foreign investors' at all.

    The purpose of the mines which export at least $4bn per year, is not to create a measly 58,000 jobs - when times are good.

    They are there to pump billions of dollars into infrastructure, agriculture and eventually manufacturing.

    I would favour criminal prosecution of anyone who has been involved in this handover. I would also favour suing the IMF/World Bank for loss of income - $10 billion would be a nice round number, but even that would not compensate for the money lost because the economy was NOT developed - loss of commerce, taxes, incomes, etc.

  3. Prof Saasa urges govt to tackle mining job losses
    Written by Fridah Zinyama and Lambwe Kachali
    Friday, November 28, 2008 10:27:41 AM


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