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Tuesday, 10 March 2009

Mine Watch (Mufulira)

The Government is now becoming more forceful :

Zambia asks Glencore to surrender two copper mines, By Shapi Shacinda, Reuters

LUSAKA, March 10 (Reuters) - Zambia has asked Glencore International AG to surrender to the government two mining units it plans to temporarily shut down in the southern African country, mines minister Maxwell Mwale said.

Mwale, the minister of mines and minerals development, said in a statement seen by Reuters on Tuesday that the government would not accept the closure of the Mufulira and Nkana copper mines, which owners say have been making losses since copper prices started to decline on the world market.

Last week Glencore notified Zambian authorities that it planned to cease operations of the two mines until copper prices reached the average level of $5,500 per tonne.

Copper for three months delivery MCU3 on the London Metal Exchange stood at $3,710 a tonne in open outcry trade earlier on Tuesday, way off last July's record high of $8,940 reached before global recession fears ravaged demand for metals.

The government wants Glencore to hand over the Nkana and Mufulira mines instead of suspending operations, Mwale said.

In 2002, Anglo American Plc surrendered to the government the Konkola Copper Mines (KCM), the country's largest copper producer, after making losses due to low copper prices.

"The government is urging Glencore to reconsider its proposed course of action in that we have had a precedence set by Anglo American, which upon realizing it was making losses, surrendered its assets to the government," Mwale said.

"In this regard, the government would like to urge Glencore to surrender the assets of both Mufulira and Nkana to ensure continued mining operations and avert disruption to social economic life of our people in the country."

The global crunch has led to a decline in demand for metals, and forced several mining firms to scale down operations or to shut down their mines in Zambia, where copper mining is the country's economic lifeblood. Copper mines are a major employer in the country of 12 million people.

Mwale said the government was keen to avoid closures at other mines, including Mopani Copper Mines (MCM), a joint venture of Glencore and Canada's First Quantum Minerals .

In December, Luanshya Copper Mines (LCM) ceased operations at the Baluba copper mine and also at Chambishi Metals Plc, the country's largest copper producer and cut back 1,700 workers, citing operational problems arising from the global crisis.

Last week, Albidon Ltd of Australia placed its Munali nickel project in Zambia under care and maintenance, blaming the crisis. Workers' unions urged the government to take over the troubled mines.

Several other mines have cut jobs in Zambia.

"(The) government cannot allow a situation where the current mine owners want only to manage the operations that are profit making and leave those that are not profit making under care and maintenance," Mwale said.

1 comment:

  1. Zambia: State Nullifies Mine Closure

    Judith Hara and Moffat Chazingwa

    4 April 2009

    THE Government has said Mopani Copper Mines (MCM) cannot close its plants without following the laid-down procedures, thereby rendering its intention to permanently close Mufulira Mine null and void.

    And Mineworkers Union of Zambia (MUZ) has clarified that MCM is not closing its Mufulira Mine on April 14, 2009 as earlier stated by the union.

    Mines and Minerals Development Minister, Maxwell Mwale said in an interview yesterday that the Government had laid-down procedure, which should be followed by any mining firm that was wishing to close down the mines.

    Mr Mwale was reacting to media reports that MCM would permanently close and further lay off 1,400 employees by April 14 this year.

    He said section 34 of the Mines and Minerals Act was clear on the procedure pertaining to suspension or closure of the mines in the country.

    The minister said the Act states that any mine that wished to close down should give a 90-day notice to the director of mines indicating that the mine was about to close and that had not been done.

    Mr Mwale said the director of mines had not been informed about the intention. The minister said the Government expected the mines to respect the laws of the land in any given situation.

    "So this means that MCM decision to close the mine by April 14 is null and void, because Government is supposed to be informed of any developments taking place in the industry.

    "But in this case, the Government has not been informed and I am not even sure if the director of mines has been informed," he said.

    On Thursday, MUZ president Rayford Mbulu told journalists at a briefing in Kitwe that MCM would go ahead to permanently close Mufulira Mine and lay off 1,400 employees by April 14 this year.

    But in another turn of events, MUZ general secretary Oswell Munyenyembe said yesterday that contrary to earlier disclosure by his union president, the mine company would only retrench 1,500 employees at Mufulira and Nkana and not close.

    He clarified in a statement in Kitwe that the mining company had since given the union a one-month notice of redundancies for 1,500 employees at the two mines to be effected next month.

    "Following an emergency consultative meeting between the MUZ and MCM management, it has come to our attention that the Mufulira Mine will not be closed on April 14 as earlier reported.

    "However, MCM has given the union a one-month notice of redundancies at both Mufulira and Nkana of 1,500 employees," he said.

    Mr Munyenyembe appealed for calm among members, saying the restructuring process going on in the company had necessitated the happenings in the mine.

    Copyright © 2009 The Times of Zambia.


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