The Association of Mine suppliers and Contractors – AMSC has expressed disappointment at Glencore owned Mopani Copper Mines – MCM decision to offer one-month contracts to all its contractors and suppliers following its insistence to place the mines under care and maintenance.
Placing the mines on care and maintenance is in effect considered as a closure as only few staff are retained leading to massive job losses. Mopani is the anchor company for two major mining towns in Zambia. One is Kitwe which is the second largest city in Zambia by population and the other is mufulira, both on the Copperbelt province.
Mine Suppliers Association president Augustine Mubanga disclosed to the Zambian Business Times – ZBT in an exclusive interview that Mopani had on July 20, 2019 written to the association suggesting to offer one month contracts to all its suppliers and contractors, pending the outcome of the appeal process against government’s second rejection for the mining firm to put its operations under care and maintenance.
Recently, Mopani received a notice from the Mines Development Department that it has rejected its proposal to suspend its operations pursuant to Section 37(2) of the Mines and Minerals Development Act (2015) (MMDA) and place its mines in Kitwe and Mufulira on Care and Maintenance.
AMSC president has bemoaned the impact that Mopani’s move will have on business as a result of terminating contracts adding that those employed by contractors will suffer the consequences as work will not be provided hence has urged the mining firm to become a good corporate citizen that will create confidence amongst its stakeholders as issues of trust are based on confidence levels created in the industry.
Mubanga added that government will also lose revenue from the collection of tax through mineral experts, contractors and suppliers and that employees will be affected most on family level.
“We are in business and long term planning is key, Mopani cannot just make decisions with short notice because this will affect our members who will not even be privileged to approach the Bank or financial institution because they will not lend you money based on monthly operations,” He said.
He said, given that copper prices on the market have started appreciating to about K6,500 per ton, it should motivate the firm to get into mining saying some boarders which closed due the Corona virus pandemic have as well opened, hence movement of goods is now facilitated.
Mubanga has since charged that Mopani should come clean about its consistent decision to close the mines saying the recent abrupt decisions can only be attributed to other unknown reasons and not the ones disclosed earlier.
Glencore, Mopani parent company was earlier in the year challenged to hand over the mining license if it had no interest in running the mine. The mine had also threatened to close the mine some time back after electricity tariffs were increased across board. The mine has also not made available its cost of copper mining per ton to help the market better appreciate its challenges in relation to copper market prices.
