KCM retrenchments to hit 2,000

KCM retrenchments to hit 2,000
Written by Chiwoyu Sinyangwe
Tuesday, May 12, 2009 4:05:27 PM

KONKOLA Copper Mines (KCM) has disclosed that the ongoing programme to cut operational costs in the wake of collapsed copper prices will lead to 2,000 job losses. Early this year, KCM retrenched about 700 miners after closing the Nkana Copper Smelter.

"The second programme of manpower reduction is under progress right now, which is (for) around 1,300 people," KCM director operations Jeyakumar Janakraj said during an analyst call conference monitored in South Africa last week.

However, Janakraj did not give a timeframe for the exercise.

He said KCM felt that the proposed job cuts would help the mining company to further overcome the negative aspect of the high production costs in its operations in the country.

"The cost that stood at H1 numbers of US$2.93 per pound has been brought down to a level of US $1.4 per pound, which is around 140 US cents per pound by various actions on the ground," said Janakraj.

KCM recently cut its production cost by about 50 per cent to US $1.4 per pound by undertaking cost reduction programme, which included the closure of the Nkana Smelter in Kitwe.

Vedanta Resources Plc, the majority shareholders in KCM, had earlier said it was looking to rationalise its workforce and reduce overall costs in its operations by 30 per cent to tide over the economic downturn.

Vedanta Resources Plc further said it was also adhering to efficient mining and wastage reduction programmes to reduce its production costs.

Last February, KCM retrenched 700 workers after closing the Nkana smelter as part of the measures to reduce the high operational costs for the mine which produces over 50 per cent of the country's total copper output.

Recently, KCM stated that it had arrived at a decision to lay off 1,300 workers.

KCM head of corporate affairs Rahul Kharkar stated that the decision to lay off workers was aimed at streamlining the operations of the mining firm.

"Under the current prevailing economic conditions, Konkola Copper Mines management announces that in line with its efforts to streamline operations, increase labour productivity and production, has arrived at a decision to retrench 1,300 employees across various departments," stated Kharkar in a statement. "This decision has been arrived at following discussions with various stakeholders. The Labour Commissioner in Lusaka was informed as per laid down procedures."

Over 10,000 jobs have been lost in the country's mining industry following the fall in copper prices on the international market.