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(LUSAKATIMES) Decline in copper prices a passing phase-Lungu

Decline in copper prices a passing phase-Lungu
November 26, 2008

Copperbelt University Professor John Lungu has urged Zambians to stop worrying about the decline in copper prices because it is a passing phase.

Speaking during an Economics Association of Zambia public discussion in Kitwe on Monday evening, Prof Lungu said Zambians should not worry because economies of India and China were growing.

Prof Lungu said it was important that Zambia handled the copper sector with care because the country’s economy was largely dependant on it.

MUZ president, Rayford Mbulu said 286 miners at Bwana Mkubwa Mine had lost their jobs and were due to get their terminal benefits today, while 50 other miners at Kansanshi were likely to lose their jobs. He said 26 other workers at Chambishi Metals slag dump had been sent on forced leave, but that reasons given for the job cuts were not justifiable.

Mr Mbulu wondered why mines should retrench workers when the current copper prices were more than double what they used to be in the past.

He said mines must remember that when copper prices were fetching US$10,000, they did very little for the communities in which they operated.

Mr Mbulu said there was no justification for mines to retrench miners because they had already made huge profits.

Mr Mbulu said there was need for the Government’s intervention in the matter as the union believed that the situation needed political will.

Mines Minister, Maxwell Mwale, says the job cuts at Bwana Mkubwa mine are not related to the fall in copper prices caused by the global financial crisis.

Mr. Mwale says Bwana Mkubwa mine has been experiencing operational challenges because it no longer processes copper ore from the Democractic Republic of Congo which has banned copper ore exports.

He said this in an interview with ZNBC news in Lusaka.

Mr. Mwale has appealed to mine investors not to send the industry into panic because copper prices are still favourable.

Universty of Zambia (UNZA) head of mining engineering, Mathias Mpande has also called on mining companies not to retrench workers on the basis of falling copper prices or the global economic recession.

Dr Mpande said in an interview in Lusaka yesterday that there was no need for retrenchments because mining companies in Zambia would continue operating profitably despite the falling copper prices and global economic recession.

Dr Mpande said by the time most of the firms came to invest into the country, prices of copper were very high and, as such, the companies made huge profits to warrant them to continue their operations.

“The mines are going to still remain profitable. Mopani, for example, has made large investments. By the time they were investing everything was on their side and they have made profits to continue operating even in the face of global economic crisis.

“I cannot see any mine closing down because there is enough copper. A mine can only close if there is no copper or it is not happy with the prevailing Government policies but not because of the global economic recession,” Dr Mpande said.

He said if any mining company in the country were to close, it would do so because it wanted to and not that it was not profitable to remain in existence owing to the global economic crunch.

With the case of Zambia, he said, possibilities of mines closing owing to the economic crunch were minimal because Chinese and Indian investors whose countries were not adversely affected by the global economic recession mostly owned them.

“India and China are not going to go under and so most of the mines on the Copperbelt will still be profitable,” Dr Mpande said.

He, however, advised the Government to come to the aid of mining companies by offering them some incentives.

He said, Government could, for example, exempt some mining firms from paying certain taxes until such a time that copper prices and the global economy stabilised.

Dr Mpande said the trend the world over had been that governments assisted the running of mining firms by offering them tax exemptions.

He said with Chinese and Indian economies remaining buoyant, the Government could enter into an agreement to directly export copper concentrates to the two countries to secure jobs for citizens working in the mines.

Dr Mpande said it was not too late for the Government to start negotiating with its counterparts in the two countries so that direct export of copper concentrates to China and India could start.

Times of Zambia/ZNBC
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Labels: COPPER, EAZ, JOHN LUNGU, MATHIAS MPANDE, MINING, MUZ, RAYFORD MBULU

posted by MrK @ 12:46 AM