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Sunday, 11 March 2012

Strike Watch (Mining)

There has been many strike disputes in recent months that it is now necessary to track these systematically so that we can have a broader picture of what is happening in the labour sector.

In the mining sector, recent strike activity has centre around First Quantum Minerals (FQM) owned Kansanshi mine, were 2000 workers down their tools on 1st March. They were demanding a higher pay increment of 25 percent.  This is the second time in two months that Kansanshi workers have gone on strike. Kansanshi is arguably our nation’s largest copper mine, producing over 230,000 tonnes per annum.

On 4th March the Government interved through VP Guy Scott  by appealing to “workers and management to resolve their differences as soon as possible in the interest of the country”. An interesting call considering Dr Scott’s government holds 20% through ZCCM-IH. Perhaps the 20% does not account for anything in terms of leverage. The workers for their part have been are being represented by Mineworkers Union of Zambia (MUZ) and the National Union for Miners and Allied Workers (NUMAW).

Dr Scott's intervention though appeared to have worked favourably for FQM. The workers resumed work on 6th March “pending the outcome of the mediation process”. MUZ president said the “investors should learn to take care of workers because production depended on them”.  Which is interesting considering that the final settlement is unlikely to be anywhere near 25% MUZ have been crying for. FQM believes the agreed deal is 15% and the only negotiations is how long it should stay in place. FQM wants it to last no more than 2 years. Not sure what happens after that!

Over the course of the five day strike, FQM claimed it lost US$5m per day in revenue and Government is lost US$1.5m in taxes. The concept of "lost" is neboulous, but not as bad as the suggestion that  FQM pays 30% taxes. 

If you are wondering what is happening at Glencore's Mopani in this area. It agreed a 17 percent pay rise with unions in February, which of course it is quick to point out is triple the rate of inflation.

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