Entrance of Mopani Copper Mines at Mufulira (Photo : MNM)
(Bloomberg) – Mopani Copper Mines Plc, the Zambian unit of Glencore Plc, plans to cut about 4,300 jobs, according to National Union for Miners and Allied Workers President James Chansa.
The company cited lower copper prices, an electricity shortage and unpaid value-added tax refunds as the reasons behind its decision during a meeting with union leaders on Monday, Chansa said by phone after the talks.
“We have said no to this idea and we’ve instead asked them to dialog with us and find a better solution,” said Chansa, whose union has about 2,400 members at Mopani. Calls to government officials including Mines Minister Christopher Yaluma and Labour Minister Fackson Shamenda didn’t connect.
Mopani is the biggest mining employer in Zambia, Africa’s second-largest copper producer, with 20,000 workers, half of them contractors. Glencore plans to suspend its operations in Zambia and at Katanga Mining Ltd. in neighboring Democratic Republic of Congo for 18 months, the company said Sept. 7.
Katanga Mining will retain 80 percent of its workforce during the halt, the company said last week.
“Mopani is undertaking a study to determine the best possible way to deal with the financial challenges the company is facing,” Cephas Sinyangwe, a spokesman for Glencore’s Zambia unit, said in reply to e-mailed questions. “The company is committed to working with all stakeholders including government and unions to find a solution.”
Chishimba Kambwili, a Zambian government spokesman, on Sunday threatened to suspend the mining license of CNMC Luanshya Copper Mines Plc if it didn’t rescind a decision to halt operations at its Baluba mine, where it sent over 1,600 workers on leave. Glencore was yet to officially notify the government of its intentions, Kambwili said on state television.
Power cuts after drought reduced water levels at hydropower dams and weaker copper prices have put pressure on the mining industry in Zambia, which is Africa’s largest copper producer after Democratic Republic of Congo.
Mopani’s workforce reduction will probably be directed at employees and the number of cuts could grow if contract positions are also eliminated, Chansa said. The company told the union it would write to inform the government’s labor department on Monday about the decision, to give it the legal 60 days’ notice before the retrenchments can take effect, he said.
Mopani will continue with capital projects and it may keep some of the more profitable sections of the mine in production, said Chansa.
Zambian President Edgar Lungu plans to meet mining unions to discuss “pressing” issues, state-run ZNBC reported on Monday, citing Chanda Kabwe, a district commissioner in the Copperbelt province. He declined to say what’s expected to result from the talks.