(DAILY MAIL) Mine firm invests $150m

Mine firm invests $150m
By MUKULA MUKULA

NON-Ferrous Africa Mining Plc (NFC) has announced new investments of US$150 million to develop the west ore body and create 1,000 new jobs as part of measures to increase profitability in view of the raised mineral and royalty taxes.

Once the west ore project is completed in 2010, the company intends to invest in the south ore body project, which has 102,030,000 tonnes of copper at an average grade of 2.21 per cent and 0.115 per cent of cobalt. The project will employ an additional 3,000 local people and 150 expatriates.

NFC deputy chief executive officer, Gao Xiang, told the Daily Mail in an interview in Kitwe yesterday that the best way to respond to the challenges of the new mineral taxes was to increase the volume of investment.

He said NFC was poised to be the biggest mine in the country once the two projects were completed in the next six years.

On the new mineral taxes, Mr Xiang said: “Do you think we have any choice, no, we have no choice but it will have a very bad effect on our employees who expect 18 to 20 per cent salary increases every year.’’

He said the new taxes would entail that Government would take away 75 per cent of the US$30 million profit that the mine makes. But the mine would look for best ways of funding the west ore development project.

He said the only concession they wanted from Government was to waive the export tax on concentrates because it was 15 per cent of the company’s profits. He said the mining company was spending K42 million per truck load of concentrate to the border.

“I want to take this opportunity to appeal to Government, our export levy for concentrate is a very heavy tax on our income. We want to be waived for 12 months since we are focused on the construction of our new smelter,” he said.

He also said it would be difficult to substantially increase salaries for workers next year because apart from paying the new taxes, a lot of money would be spent on new investments.

The company had no plans of reducing its workforce because the intention was to increase productivity and be able to increase the profitability of the mine.

“We have to increase our production…that is the only solution for this. I don’t think reducing of employment will be the best way to overcome the difficulty. We hope the prices of copper stay like this at the international market,’’ he said.

NFC employs 2,262 but the west ore body development project would employ an additional 800 Zambians during the construction phase while 1,000 Zambians would be employed once the project was at full production.

Mr Xiang appealed to the Ministry of Home Affairs to approve an application for work permits of 163 Chinese experts who were expected to execute the west ore development project.

A South African company has been contracted to sink a shaft at the west ore body whose lifespan is estimated at 25 years.

And Minister of Labour and Social Security, Ronald Mukuma who visited NFC yesterday told management that Government was impressed with the investments the mine had made.

The minister advised NFC management to integrate the Chinese and Zambian workers to avoid misunderstandings that arose as a result of lack of integration.

Mr Mukuma said the mines should ensure that they employed Zambians on permanent basis and train them in various fields to ensure transfer of skills from the Chinese to the Zambians.

NFC chief executive officer, Luo Xingeng, said the company was seeking assistance from the ministry of labour and social security to help it understand the country’s labour laws. He said it took the mining firm three years for managers to start understanding the labour laws.

At Mopani Copper Mines, Chamber of Mines president, Passmore Hamukoma, told the minister that mine owners tended to give contracts to foreign firms because Zambian companies were not very competitive.

The minister said Government wanted the mines to give business to Zambians so that this could have a multiplier effect on employment levels.

He urged the mines to support colleges and universities so that they could produce well skilled staff to work in the mines.

Mr Mukuma urged the mines to come up with session plans so that executive jobs could be taken up by Zambians.

He said it was dangerous for the country to sustain its mining operations using foreign expertise because there was bound to be a crisis in the event that they left suddenly.