Luanshya Copper Mine, a joint venture of the Swiss-based International
Mineral Resources and Bein Stein Group Resources of Israel, closed its
operation in December 2008, resulting in 1,700 retrenchments.
"I am suffering very much. I got my [termination] package of around 15
million Kwacha [about US$3,000], but then I had a bank loan. It was
supposed to run for three years, according to the agreement; they
[bankers] deducted everything at once from the package and I remained
with nothing. In fact, I still owe the bank," Geoffrey Mwape, a former
Luanshya employee, told IRIN.
"Life is very hard. I have to pay bills and rentals. I am living like I
don’t know what tomorrow will bring, as if I was not in employment. My
children have been sent back from school [because I cannot pay the
fees]."
Global demand
Copper is a key metal in the electronics and building industries, but
the global economic slump in the demand for commodities has seen
international copper prices tumble from record highs of nearly $9,000mt
between 2005 and 2007 to about $3,000mt at present. In response, labour
forces are being reduced, expansion projects put on ice and mining
operations closed.
The Bwana Mukubwa and Luanshya Copper mines now have only maintenance
staff, while the owners of Luanshya have also shut down their Chambishi
copper smelter and suspended their $354 million Mulyashi mine project.
"What is happening is a very sad scenario – we can’t have a situation
where investors are just pulling out at their will and government is
not doing anything; it’s not right and it should not be condoned," said
Chishimba Kambwili, the parliamentary representative for Luanshya who
recently staged a one-man protest against mine closures outside State
House, Zambia’s presidential residence in the capital, Lusaka.
"Our people are suffering, where is the government? They are being made
paupers, where is the government? They can’t take their children to
school; they can’t feed their families, where is the government?" he
asked.
Copper accounts for 80 percent of Zambia’s foreign earnings and since
2003 has been the main driver of an annual economic growth rate of five
percent.
Boom and bust
Copperbelt is no stranger to unemployment: copper prices stagnated
throughout the 1990s, and the latest round of job losses is expected to
rekindle memories of those days.
Mopani Copper Mines recently announced it would retrench up to 1,000 of
its 16,000 employees by the end of February 2009, and the country’s
biggest mine, Konkola Copper Mines (KCM), owned by the London-listed
Vedanta Resources, this week retrenched 700 of its workforce of 15,000
after shutting down its smelting plant.
Many retrenched miners have resorted to informal trading to make a
living. "I can’t venture into farming now because I have no money to
buy [agricultural] inputs and besides, I have lived my life as a
miner," said Emmanuel Sampa, who has worked at three mines, the last
being Luanshya.
"My children have passed [grade seven and nine examinations] but I have
no money to take them to school. Last week, I went and closed my two
[bank] accounts because maintaining them is very costly now," he said.
"I am selling my TV and sofa so that my children can go to school – I
bought the TV at 1.2 million kwacha [$220}, but am selling it for
500,000 kwacha [$90]."
Zambia’s mines were major employers in recent years when the copper
price enjoyed a renaissance, encouraging expansion of the mining
industry and creating jobs.
About two-thirds of Zambia’s 11.7 million people live on a $1 or less a
day, and only 500,000 formal jobs exist in the country, according to
the Central Statistical Office.
Survival
"It’s a problem how people are surviving, because it is not just people
who were working for the mines that are losing jobs. Many companies
that depended on the mines, like those in the construction and
supplying business, are now folding because there is no more business
for them," Peter Kahokola, a civic leader in Copperbelt, told IRIN.
"What this means is that the councils [municipalities] throughout the
province are finding it very difficult to operate – the councils depend
on these companies for survival through rates and other taxes. Now,
most council workers have to go for two months without pay. We have
started seeing a lot of crime because people want to survive."
The curtailed resources have also limited the capacity of local
authorities to effectively provide public services: bad roads, heaps of
rubbish and unreliable water supplies are now a common feature in towns
across the region.
"Things are really bad; in most of these towns, including Luanshya, the
mine hospitals and clinics were completely free for miners and even
surrounding communities in some cases," Kahokola said.
"Now, it is mandatory that we should all pay 25 percent of the medical
bills, so people are failing to go to the hospital because they simply
have no money to pay, and we may see a lot of deaths over the next few
months if the situation is left unchecked."
Zambia’s president, Rupiah Banda, recently announced that the
government would take over mines facing operational difficulties, but
maintained the state would not consider nationalising all mines unless
the private sector failed to sustain their operations.
Zambia is Africa’s largest copper producer. At the peak of production
in the 1980s, the country produced about 750,000mt of finished copper
annually, before output dropped to 200,000mt in the 1990s. Current
production is about 600,000mt annually, and a government projection of
1 million metric tonnes in 2010 is viewed as unlikely.
(IRIN)
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