‘Govt dissatisfied with KCM’s excessive outsourcing’
By Kombe Chimpinde
Sun 22 Aug. 2010, 04:40 CAT
A highly placed source in the Ministry of Mines has disclosed that government has expressed dissatisfaction over Konkola Copper Mine's excessive outsourcing of operations a concern also raised by the National Union of Mine Workers (NUMW) and Mine Union of Zambia (MUZ).
The source disclosed that the labour ministry has since summoned KCM to present its data concerning the number and nature of the businesses and operations that KCM is outsourcing.
This week the MUZ announced its intensions to stage a demonstration on Monday to protest over the matter.
KCM has however justified it’s reasons for outsourcesing, stressing that it lessened some of the costs it was incurring afrom undertaking much projects internally.
In a meeting held this week between the labor minister, KCM management and mine workers unions, government expressed its satisfaction on the operations of the mine and asked KCM to present all the records comprising stock of its operations so that government would advise which ones were or not necessary.
“The mines ministry is not happy. They want to see a situation were outsourcing is done away with in cases were it is not necessary. Resolutions to the meeting held this week could not be made because KCM did not have data concerning there operations that they subjected to outsourcing which the minister could refer to,” he said.
“What they want now is the specific projects they are sourcing, the type of jobs and the number of people on the project so that they can asses the relevance.
“..for example how can the Ministry of Home Affairs give a work permit to someone at the age of 70 who is also in their retirement stage, also how can they give a work permit to someone who has come to take up a clerical job which a Zambian can do.”
The mines minster has also blamed such occurrences on failed coordination between between the Ministry of Labor and Social Security and Ministry of Home Affairs over the issuance of work permits.
He explained that outsourcing was a common in mining operations although the danger was making some of this outsourcing permanent as it inhibits and defeats the concept of Zambianisation.
“ MUZ's concern was justifiable because they are also worried about losing membership and the welfare of the mine workers,”said the source.
The meeting was attended by deputy Minister of Mines and Minerals Development, Minister of Labour and Social Security and an official from International Labour Organisation.
The Konkola Copper Mines run by Vedanta also operates the Numpundwe Mines, Nkana Smelter, Chingola’s Nchanga Division and Konkola Division in Chililabombwe.
Labels: CASUALISATION, KCM, MINISTRY OF MINES AND MINERALS DEVELOPMENT
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State wont re-indroduce the windfall tax, maintains Mwale
Monday, May 10, 2010, 15:49
Mines minister Maxwell Mwale and Chinese state grid corporation executive vice president Shu Yinbiao exchange notes in LusakaGovernment has maintained that it will not re-introduce the Windfall tax on the mining sector as it will militate against levels of mineral exploration activities in the sector.
Mines and Minerals Minister Maxwell Mwale says explorations is the backbone of the Zambia’s future in the mining sector stressing that the introduction of super taxes of mines would lead a drop in explorations as witnessed when the windfall tax was introduced in Zambia.
The Minister was speaking at the presentation of a cheque of dividend, a payment worth $ 18.1 million, by Kansanshi Mining PLC a major holding of First Quantum Minerals FQM to Zambia Consolidated Copper Mining Investment holdings ZCCM-IH, a minority share holder of Kansanshi.
The Dividend is the first single largest payment ever received by ZCCM-IH from the firm which is the highest since it began its operation in the mining sector.
Mr. Mwale said the gesture by the firm is a clear demonstration of Government and the countries benefits from foreign investments in the sector as opposed to some sections and sectors of the country that Government is not benefiting from its investments.
[What a lying, sanctimonious jackass. The mines are making at least $2.4 billion in profits a year. Most companies pay out 50% of their earnings in dividends. This means that the biggest mining company in Zambian made how mcuh profits? $18.1 million is a joke. It is the equivalent of beads and coins. - MrK]
And First Quantum Minerals FQM Resident Director Kwalela Lamaswala said that the payment follows a review of Kansanshi Dividend Policy by the board and comprises a special Dividend of US$ 15.6 million for the end the financial year of 2007 while the other US$ 2.5 million accounts for the end of the 2009 financial year.
He said the objective of the review of its policy is to ensure that its share holders receive an attractive return on their investments.
Speaking at the same function as he received the cheque ZCCM-IH Board Chairman Alfred Lungu said that the Dividend not only represents a valuable return on its investment but that it will also enhance opportunities of the Government holding to supplement its investment portfolio for the ultimate benefits of the Zambians.
[What a goddamned freak. He is saying that instead of even paying out this miserable $18.1 million, they are going to buy more shares in the mining companies, in effect directly returning it to the company that paid it out. These people are total scumbags. I guess massa doesn't want to leave a single cent in Zambia, they they obey because of the bribes they have personally received. - MrK]
He also said the Dividend will help ZCCM Holdings to offset the remainder of its Legal liabilities carried over from the old ZCCM Limited before the firm’s transformation into ZCCM in 2002.
Mr. Lamaswala called on other investment firms to emulate what Kansanshi has done in order demonstrate their investment worthiness in the sector.
[These people are criminals. Nothing less. They are robbing the people of Zambia blind. All the people who die in hospitals that have no medicine, all the children who are getting no education - it means nothing to them. They can watch their own people die in the streets, and it will probably make them feel good because it isn't them. These people shouldn't be in government or free on the streets, they should be in jail for fraud and manslaughter. This is the most corrupt bunch of crooks ever to pretend to be politicians. A military coup would be better than this.
ZCCM-IH owns 20% of Kansanshi Mining PLC. When was Kansanshi's last financial statement? If we presume that they paid out 50% of their profits in dividends, and ZCCM-IH owns 20% of it's shares, then Kansanshi would have us believe that they made (18.1 mn x 2 x 5 =) $181 million in profits. That is absurd.
Kansanshi Mining (First Quantum PLC) had an output of 45,073 tonnes in the first half of 2009.
In 2008: 215,000 tonnes
Plannted 2009: 244,000 tonnes
Even if their turnover in 2009 was 215,000 tonnes (like in 2008, being conservative), and if the copper price on average was $7,000 (again being conservative), they would have a turnover of $1.5 billion. If their cost was 40% of that (like Equinox, because they are not publishing their financial data), their profit would be $900 million. If they paid out 50% of profits as dividend, they would be paying the government $450 million, not $18.1 million for 2007 or $2.9 million for the end of 2009. - MrK]
QFM
Labels: CORRUPTION, MAXWELL MWALE, MINISTRY OF MINES AND MINERALS DEVELOPMENT, WINDFALL TAX
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Ministry of Mines officers approach budgets critically
Written by Chibaula Silwamba and Ernest Chanda
Tuesday, July 28, 2009 5:22:23 PM
SENIOR officials in the Ministry of Mines and Minerals Development have opposed a
US $60,000 [about K312 million] expenditure on advertisement for oil and gas explorations bids in foreign media because it was not budgeted for in this year's national budget.
But Ministry of Mines and Minerals Development permanent secretary Dr Goodwin Beene has said the transaction is within this year's national budget.
According to insiders familiar with the pending transaction, the ministry intends to spend US $60,000 on adverts in the international media for companies wanting to bid for oil and gas explorations in Zambia.
"The Ministry of Mines [and Minerals Development] wants to spend US $60,000 [about K312 million at yesterday's exchange rate] on advertisements in foreign media for oil and gas explorations bids. But that money was not budgeted for in the 2009 national budget. Therefore, some senior officials opposed the expenditure on grounds that it was not in line with the procedures because it was not authorised by Parliament as it was not budgeted for under the Ministry of Mines and Minerals Development. The money was supposed to have been budgeted for under Geological Survey Department, a department responsible for oil and gas explorations," the insider revealed.
"Since it was not budgeted for, it's not clear where the ministry will get that money from to publish the adverts. As you know, similar adverts were published in the local media, that was budgeted for but for foreign media that was not done. It is for that reason that some officials in the ministry guided their permanent secretary over the transaction but it seems the PS is not heeding their advice. Some of those officials opposed to the expenditure might even be disciplined for insubordination."
The insider said following the senior officials' opposition to the expenditure, Dr Beene has asked the department of human resource and administration to be the requesting the department for the money in order to finance the advertisements in foreign media.
"The PS wants to justify the expenditure through HRA [human resource and administration department] as the requesting department for the expenditure but it seems even that department is not comfortable with the arrangement because HRA has no powers to request for funding on behalf of another departmental warranty holder," the insider said.
"If this expenditure will be allowed without parliamentary approval, it will be irregular and it might cause problems for the ministry. The Ministry of Mines [and Minerals Development] does not have sufficient funds and as you may be aware, that ministry is the second least funded ministry from the Ministry of Labour [and Social Security]."
When contacted for comment, Dr Beene queried the reporter about the source of his information.
"Who gave you that information? If you are sure that the information you have is accurate, go ahead and publish," dared Dr Beene. "[But] whatever transactions I am doing are within this year's budget."
Zambia is believed to have oil and gas deposits in North Western and Eastern provinces.
Labels: GOODWIN BEENE, MINISTRY OF MINES AND MINERALS DEVELOPMENT
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Mine jobs cuts irk State
By YANDE KAPEYA
GOVERNMENT is disappointed with some mine owners on the Copperbelt who have continued to lay off workers despite the appreciation in the price of copper on the London metal exchange.
Minister of Mines and Minerals Development, Maxwell Mwale said the price of copper on the world market was gradually going up and currently trading at US$4, 300 per tone from US$ 2,800 in December last year.
“As Government we are closely monitoring the price of copper on the London metal exchange and indications so far show that it is re-bounding as the price is appreciating,” he said.
Mr Mwale said this in an interview in Lusaka on Thursday in response to the decision taken by Konkola Copper Mines (KCM) management on Wednesday to retrench 1,3000 employees.
He said Government was saddened that some mine owners were retrenching workers based on the global meltdown on principal commodities such as copper.
“Am aware that KCM has already offered letters of retrenchment to workers and this is unfortunate and as Government we are saddened because this means more people will go onto the streets,” he said.
Mr Mwale said Government was aware of the fact that mining companies had to cut operational costs to survive the global financial crisis but that laying off workers should be the last resolution.
He suggested that mine owners should consider streamlining the expatriate labour workforce to reduce on operational costs.
”Let me once again reiterate my appeal to mine owners not to use the global financial crisis as an excuse to retrench our workers. Government will not accept this kind of attitude as it is detrimental to development,” he said.
Mr Mwale said Government needed the support of all stakeholders because it was trying as much as possible to address the negative effects of the global financial crisis on the economy.
He noted that in the Democratic Republic of Congo (DRC) and South Africa over 3,000 and 6,400 workers respectively had lost their jobs due to the global recession
“ So you can see from these figures that the global financial crisis has not only affected Zambia but globally, all countries have been affected.
“And just to demonstrate our commitment to address the crisis, Government last week instituted a national indaba where stakeholders from various sectors convened to share ideas in finding solutions to the many challenges the country was facing,” he said.
Mr Mwale however said Government was happy with some mining companies that have rescinded their decision to put their operations under care and maintenance.
“We haven’t received any letters from mining companies indicating that they want to close meaning they are revaluating their positions,” he said.
KCM management announced on Wednesday that it will lay off 1,300 workers out of the 12,200 work force.
KCM further stated that this was in line with its efforts to streamline the operations to increase productivity and production.
Meanwhile, Mr Mwale says operations at the closed Luanshya Copper Mines on the Copperbelt are expected to resume in May this year.
He said government has been holding discussion with various prospective investors who have shown interest in taking over the operations of Luanshya mine.
Mr Mwale said in an interview in Lusaka yesterday that Government had received overwhelming response from both local and foreign companies interested in taking over the mine.
“As Government, we have not yet decided who will take over but a number of investors have expressed interest to take over and we are optimistic operations will resume next month,” he said.
Mr Mwale said miners and the people of Luanshya should remain patient as Government was doing everything possible to ensure operations at the mine resume.
“My appeal to the people of Luanshya is they should have confidence in Government and they should not give up hope as very soon, the mine will resume operations and their self esteem will be restored.
Luanshya Copper Mines management suspended operations late last year citing the global financial crisis as a major contributing factor.
The mine is currently under care and maintenance.
Labels: MAXWELL MWALE, MINISTRY OF MINES AND MINERALS DEVELOPMENT
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Re-apply for mining rights – State
By CYNTHIA MWALE
THE Ministry of Mines and Minerals Development has called on all firms whose mining and non-mining rights were granted under the repealed Mines and Mineral Development Act of 2008 to apply for new licences.
Minister for Mine and Minerals Development, Maxwell Mwale, said in an interview yesterday that under the new Act passed last year, the maximum area of prospecting by an individual prospector was 10,000 square kilometres.
Mr Mwale said if an area was above the stipulated 10,000 square kilometres, the prospector needed to apply for another licence.
“For instance, if under one firm, you have 50,000 square kilometres, that firm needs to apply for five different licences,” he said.
A notice on the transition period obtained by the Daily Mail yesterday states that the Ministry of Mines and Mineral Development Act Number Seven of 2008, which was effected on April 1, 2008 required that a holder of a mining right or a non-mining right shall within a period of one year from the commencement of the Act, apply for a mining right or non-mining right.
It indicates that all mining rights holders have to apply for new licences and permits.
Labels: LICENSES, MAXWELL MWALE, MINING, MINISTRY OF MINES AND MINERALS DEVELOPMENT
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KAGEM snubs mines deputy minister
By Correspondent
Monday March 03, 2008 [03:00]
KAGEM Emerald mining company management on Saturday snubbed mines deputy minister Boniface Nkhata despite being informed of his visit to the mine. The Emerald and Semi-precious Minerals association of Zambia (ESMAZ) organised Nkhata’s visit to the mine but the Indian managers did not meet him although they were seen driving within the mine premises. Only the Zambian manager, Marlon Zimba, was delegated to explain the operations of the company to Nkhata.
Nkhata, who is in charge of small-scale mines, said he was equally disappointed by the attitude of the management at the company. He said the managers’ attitude was a clear indication that they had no respect for the government, which allowed them to come and mine emeralds in the country.
Nkhata was also shocked at the deplorable conditions in which state police officers were living, at Kagem Mine and urged the emerald mining company to improve the situation. Nkhata found out that the offices had poor diet mainly consisting of kapenta prepared without cooking oil.
He said he was disappointed that the management at the mining company had not bothered to rehabilitate the shelter for the security officers despite the fact that they were guarding their emeralds.
He said, four years ago, former Home Affairs Permanent Secretary Peter Mumba had instructed the management at Kagem to rehabilitate or put up decent shelters for police officers, but up to now the company had done nothing.
He said it was disappointing that the company which was making huge profits from the emeralds could fail to rehabilitate the structures for the officers, let alone, improve their diet.
He said the interests of Zambians was not being protected at the emerald mine because State Police was not allowed to enter the strong room where they separate good stones from waste.
“I must say I am not happy with what is happening at Kagem Mining Company because the management seems not to care about the interests of Zambians. It appears that their interest is only to make huge profits from our gemstones and they do not care what happens to Zambians,” he said.
“When I came they snubbed me and did not even bother to talk to me and now I am seeing the very deplorable state in which police officers are living in,” Nkhata said.
And Zimba tried to defend his management that it had been there for three months only and not much could be expected from it.
ESMAZ general secretary Victor Kalesha said he was disappointed that the Indian management at the Emerald mine snubbed the minister despite being informed of his visit to the mine.
The ESMAZ team, led by association president Benjamin Njanji advised Zimba to explain to his management that it was wrong for them to treat Zambians and government ministers like they were nothing.
“You Zimba, you should not defend things which you do not know. We are not happy with what these Indians are doing here, where they snub government officials and keep police officers who are guarding the emeralds in deplorable conditions. So you are supporting them for snubbing the minister,” said Kalesha.
“What we expect of you, is to tell your management to do things that will make Zambia happy and not miserable as if it is not their country. If investors come here, they should share their joy and happiness with Zambians. We want investment that will benefit both investors and Zambians.”
Labels: KAGEM, MINISTRY OF MINES AND MINERALS DEVELOPMENT
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Mines Investors 'Cheating' on Dividends - Committee
The Times of Zambia (Ndola)
21 August 2007
Ndola
THE Parliamentary Public Accounts Committee (PAC) has revealed that mining companies are under declaring their profit margins hence the failure to remit dividends to the Zambia Consolidate Copper Mines Investment Holding (ZCCM-IH). The PAC expressed concerns when Mines and Minerals Development Permanent Secretary, Leonard Nkhata, appeared before the committee in Lusaka yesterday in the company of ZCCM-IH chief executive officer Joseph Chikolwa.
Nchelenge member of Parliament (MP), Ben Mwila, (NDF) said copper prices were trading well on the international markets and therefore, the profits declared were below the expectations. Mr Mwila said the price of copper was currently at US$7,000 per tonne resulting in mining firms making profits that should be correctly declared.
"These figures of losses are not correct. Prices of copper are too high. If the profits are going to be like this, Zambians are not going to benefit anything. You have to monitor the profitability," Mr Mwila said.
Luena MP, Charles Milupi, (independent) who is also chairperson of the committee said it was important for ZCCM-IH to realise that the institution was cardinal to the economy of the country. He said ZCCM-IH was the eye of the Zambians and should ensure profits realised by mining firms were correctly declared.
Mr Nkhata had earlier submitted that AHC Mining Municipal Services had accumulated loss of K13.2 billion as at March 2005, while Konkola Copper Mines (KCM), which was bought by Vedanta Resources as the majority shareholders, accumulated a loss of $186 million.
Since 2005 however, KCM had paid dividends of $2.3 million to ZCCM-IH.
Mr Nkhata argued that mining firms were not declaring dividends because of the losses they incurred and cash flow constraints which most of them experienced. He also explained that Roan Antelope Mining Corporation of Zambia (RAMCOZ) never made a profit and eventually went into liquidation. In 2004, its assets were sold to J&W and the company was renamed Luanshya Copper Mines.
In 2004, Luanshya Copper Mines incurred losses amounting to $1 million. Other mines that made losses include NFC Africa Mining, Chibuluma and Chambeshi Mines.
Mopani Copper Mines (MCM) was the only firm that recorded a profit of $6.8 million in 2003, $85.7 million in 2004 and $28.1 million in 2005.
"Mopani Copper Mines made a profit of $75.9 million over the period 2003 to 2005. The profit was ploughed back into rehabilitation and expansion projects, but it was not enough," Mr Nkhata said
However, Mr Chikolwa said his management team was currently working at coming up with a policy on dividends.
He said this in response to a question from Mbabala MP, Emmanuel Hachipuka, (UPND) who wanted to know whether there was a policy on declaring dividends.
Tourism, Environment and Natural Resources permanent secretary, Russell Mulele, told the committee that the Zambia National Tourist Board (ZNTB) was undergoing reorganisation because of the proposed Zambia Tourism Board Bill.
Chipangali MP, Vincent Mwale, (MMD) asked Mr Mulele whether it was justified for ZNTB executive director to be entitled to a salary of K42,240,000 per month.
The remuneration were relatively high when compared to other organisations like Zambia Wildlife Authority (ZAWA) where the chief executive officer gets K22,306,900, National Heritage Conservation Commission where the officer is entitled to K15, 149,192 and the Museums Board, where the officer is entitled to K12,250,177.
Mr Milupi also asked Mr Mulele whether Zambia was getting the benefits from paying such an amount to the ZNTB executive director.
Director of Tourism, Justina Wake, said it was justifiable to pay such an amount arguing that the number of tourists coming into the country was on the increase.
In 2005, 650,000 tourists came into the country while 690,000 came in the year 2006.
Labels: CHARLES MILUPI, CORRUPTION, MINING CONTRACTS, MINISTRY OF MINES AND MINERALS DEVELOPMENT, PAC
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Govt to continue signing deals with big investors
By Joan Chirwa
Thursday August 02, 2007 [04:00]
GOVERNMENT has said it will continue making development agreements with large-scale investors, and has promised to publicise the whole process for public scrutiny. And the government has further indicated that it would not allow tax holidays in the mining sector, but work towards the adoption of a standard corporate tax rate for the industry.
In a draft mining policy compiled by the Ministry of Mines and Minerals Development late last year to replace the 1995 policy, the government states that once the new policy is implemented, new development agreements would be subject to issues such as parliamentary ratification, containing fiscal relief measures preceded by being gazetted and published for public scrutiny.
The proposed new policy further states that although development agreements would be continued, provisions relating to the fiscal climate would only be included in exceptional circumstances and only after inter-ministerial approval including the Ministry of Finance and National Planning and parliamentary ratification.
The government is also planning on the periodic review of tax incentives and other forms of fiscal concessions in the new policy to reflect changing macro-economic and market conditions.
Discussions are currently going on regarding the revision of the development agreements made with the mining companies several years back, considering that copper prices were currently fetching at an attractive price on the international market.
In this year’s national budget, the government also announced that royalty taxes would be revised from 0.6 per cent and two per cent to three per cent for both base and precious metals respectively.
This is an effort to increase government revenue from its vast mineral resources.
The country last year gained K35 billion from mines in form of royalties compared to profits of above K1 trillion earned by the mining companies in the country.
And the document further indicates that the government is currently seeking ways of removing barriers to equity participation by Zambians in mining companies.
It is noted that the challenge of increasing the level of ownership and participation by Zambians in mining companies is assuming growing importance.
The draft policy states that the absence of the Zambian private sector in the ownership of the mining industry remained a major challenge for the government.
“Government will do its utmost to remove barriers to equity participation by Zambians in mining companies, within the overall framework of the citizen economic empowerment Act passed by Parliament,” states the policy.
Labels: DEVELOPMENT AGREEMENTS, MINISTRY OF MINES AND MINERALS DEVELOPMENT
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