Maravi

Anxiety, fear of job loses grip miners

Anxiety, fear of job loses grip miners
Written by Kabanda Chulu, Zumani Katasefa and Amos Malupenga
Tuesday, December 16, 2008 8:41:27 PM

Anxiety and fears of job losses on the Copperbelt have gripped miners with Mine Workers Union of Zambia (MUZ) calling on the government to urgently address the crisis.

And President Rupiah Banda has directed finance minister Situmbeko Musokotwane to urgently travel to the United Kingdom to meet Puku Minerals to discuss possibilities of taking over Luanshya Copper Mines (LCM), which the owners J&W Investment Group have placed on care and maintenance.

MUZ secretary general Oswell Munyenyembe said yesterday that the government and other relevant authorities should now be aware that the rising spate of mine operations, closures and retrenchments was reaching alarming levels and needed urgent and concerted actions to stem job losses and finding practical measures to weather the storm. He said as a union, they had been inundated with notices of redundancies and cessation of some mine operations, as a result of the global financial crisis and continued fall in metal prices.

“In the recent days, the union has been in receipt of countless notices of several mine operations being put on ‘care and maintenance', suspension of operations and in some cases closure, thus throwing many of our members in the streets to face unemployment, loss of income, hunger and abject poverty,” Munyenyembe said. “The union has received notices that 800 KCM employees will be pruned; 500 Chambeshi Metals employees will be put on recess due to the suspension of operations of mainly the smelter and other operations, Prosec LCM site is offloading 500 employees while the Mufulira site employing 400 miners has been closed. JVC Mufulira site with 107 employees has received notice to cease operations and JVC Nkana is likely to shed over 200 employees; and MCM is targeting 4,000 permanent and contract employees in measures aimed at saving operational costs and sustaining operations.”

Munyenyembe called upon the government and all key stakeholders to take bold and fast tracked emergency measures to ameliorate and cushion the impact on workers, faced with rising mealie-meal prices and other essential commodities.

“In an emergency like the one we face today, we should not shy away from even suspending the National Constitutional Conference and other medium term and long-term projects to mobilise resources for maize importation and supporting the domestic economy and currency - the kwacha - if we have to weather the storm,” Munyenyembe said. “We have seen that the Food Reserve Agency is not moving quick enough and with enough maize stocks to stabilise the prices of mealie-meal on the market. On the other hand, despite the oil prices coming down, the Energy Regulation Board is also taking long to adjust downwards, the pump prices to bring down the costs of transporting goods, merchandise and travel for citizenry.”

Munyenyembe said times like this should compel the government to find practical uses of foreign exchange reserves to support operations that are threatened or under pressure. He said they shared views expressed by Roan PF member of parliament Chishimba Kambwili that just like government used to borrow to support ZCCM operations, government should approach the World Bank and the IMF for multilateral grants or letters of comfort to mine companies to access credit to support operations.

“We should even begin to think outside the box and look at ZCCM-IH and transform it into an equity partner ready to put under its wings small and viable operations that are unable to attract loan or project finance on better terms,” Munyenyembe suggested. “Is it not a wonder that amidst all the financial turmoil and fall in commodity prices, Chile is quiet and running cost effective, low-cost mines under state parastal - Coldeco, which as a company enjoys economies of scale.”

Munyenyembe said the DRC still retains Gecamines as a significant player in the mining operations. He said for Zambia, ZCCM as an investment house was not suited too small; too constrained with too little shares and resources to play any significant roles to protect the interests of the country and its people.

“As a union, we are worried at the severe impact of the global turmoil on small marginal operations, contractors and subcontractors who have to bear the severest brunt of the meltdown,” Munyenyembe said. “In our case, Chambeshi Metals smelter, JVC, Prosec and Anvil-Nchelenge are first on the line of casualties and MCM and KCM have equally not been spared.”

He said in the recent past, meetings had been held between the miners' unions, mining employers and government to find domestic solutions to the crisis that has engulfed the mining industry and many sectors of the global economy. He said whilst the meetings had been important in reaching common understanding and shared positions on the way forward, these meetings should continue to put into effect remedial measures.

“We need to move beyond mere assurances to embrace concrete measures to domesticate the crisis and solutions that are needed to weather the storm,” he said. “With regard to our members, we are distressed that they are first to be sacrificed in measures to weather the storm and yet they never benefited from seven years of the boom when our employers privatised profit but are now eager and fast to socialise anticipated costs and losses.”

Meanwhile, President Banda has directed finance minister Situmbeko Musokotwane to urgently travel to the United Kingdom to meet Puku Minerals to interest them into taking over Luanshya Copper Mines (LCM), which the owners J&W Investment Group have placed on care and maintenance.

Under care and maintenance, LCM would stop production and all employees would not be working except for security personnel and a few administrative staff who would be manning the premises. Some experts in the mines explained that putting a company under care and maintenance was the same thing as closing down the mine.

During a closed-door meeting with senior management, MUZ officials and other stakeholders on Saturday in Luanshya, President Banda said there was need to find solutions to the challenges facing LCM.

According to sources, President Banda said government was considering various options of ensuring that the mine continued operating in order to avoid problems that occurred when Roan Antelope Mining Corporation (RAMCOZ) was running the mines.

The source revealed that President Banda made it clear that the government did not want to experience an operational gap when the mines stop production hence their willingness to engage Puku Minerals with possibilities of taking over the mines.

“During the meeting, Roan MP Kambwili proposed that government should allow Puku Minerals to take over the mines and he offered to avail the contacts,” the source said. “But President Banda responded that the Minister of Finance had the contacts and will make follow- ups once he is in the UK this week. Actually, engaging Puku Minerals is one of the options being considered and President Banda said if negotiations to find an investor take longer, ZCCM Investment Holdings should take over the mines in the short term because government does not want to see a repeat of the RAMCOZ scenario where Luanshya almost became a ghost town.”

Puku Minerals is owned by Weatherly International and was one of the bidders for the LCM after the RAMCOZ saga but instead J&W Investment of Switzerland was selected as a preferred bidder and bought the mines at a cost of US $7.25 million in 2004.

President Banda also directed LCM management to pay workers if they were to be retrenched in order to ensure smooth transition of operations.

“When President Banda asked [LCM chief executive officer Derek] Webbstock how long the care and maintenance will take, Webbstock responded that it will take between 12 and 18 months,” the source said. “At this point the President shook his head and asked management to pay workers all their dues before leaving. But Webbstock said the company has no money and only guaranteed December 2008 salaries and Christmas bonuses. Webbstock also suggested that the company can claim back the money that was recently paid for the licence fees for the Muliashi Mines because under the law, if production has not commenced, the mining company can make certain claims.”

The sources further disclosed that LCM management in their projection and business outlook, stated that copper prices would remain below the US $4,000 per tonne level for the next 12 months.

“They said they want to cease production for about a year or more but it seems they just want to leave because there are several indicators pointing to management's decision to place the mines under care and maintenance since the company has stopped underground development and the blasting process and these are key factors in mining operations,” the source said. “The company has also shut down its cobalt and copper smelter and processing plant in Chambishi hence showing that they just want to leave the country.”

Other indicators pointing to this care and maintenance position includes management's decision to send back expatriate staff with proper retirement packages.

LCM public relations officer Sydney Chileya refused to comment and referred the matter to Webbstock, whose mobile phone remained off by press time.

The sources said that President Banda also asked LCM to stop retrenching expatriate workers because he thought the investors could be playing gimmicks.

“The President also ordered the mines to stop the sale of scrap metal with immediate effect. This was after Copperbelt permanent secretary Jennifer Musonda raised concerns about the link between asset stripping and selling of the scrap metal. Webbstock obliged,” said the source, adding: “And shareholders are actually expected in the country this week and they are going to have a meeting with the President at State House and they are likely to visit the mines.”

And MUZ Luanshya branch chairman Boniface Kabwe said management should be clear about what the care and maintenance position meant to the workers' welfare.

“We do not know what is really happening, whether workers will continue getting their salaries or not because we have not been told anything relating to this matter and we do not know when the actual date of stopping operations is,” said Kabwe. “But we have left everything in the hands of government to decide the way forward because we do not want a repeat of RAMCOZ days.”

Meanwhile, Kambwili said the people of Luanshya would die like rats if the mines were closed.

“Closing the mine without paying the workers will mean total war and we shall not allow a situation where a company is closed without first paying the workers,” warned Kambwili. “Government can also borrow funds to ensure smooth running of the mines because closing down the mines will make the people of Luanshya to die like rats.”

Labels: JOBLOSSES, LCM, MINING, MUZ, OSWELL MUNYENYEMBE, RUPIAH BANDA, SITUMBEKO MUSOKOTWANE

posted by MrK @ 8:41 PM