Zambia Threatens to Revoke the Licenses of International Mining Firms

Zambia Threatens to Revoke the Licenses of International Mining Firms
Zambian president Michael Sata has threatened to revoke the licenses of firms trying to blackmail the government

AFRICANGLOBE –  Zambian President Michael Sata has warned mining firms against blackmailing his administration and has since threatened one of the firms that it risks losing its license if it fires its workers, according to a statement released by his office yesterday.

Last week, Konkola Copper Mines Plc, a unit of London-listed Vedanta Mining Group, announced that it will lay off 1,529 workers in line with its continued restructuring of operations. The company said it was moving towards mechanisation and automation in view of decreased copper grades at some of its mines.

But Sata said his government will not allow the mining giant to fire even one miner and threatened to revoke its licences if it went ahead.

“These mining companies want to be exporting copper concentrates to avoid paying taxes. Please go and tell Mr Kumar (the mining firm’s chief executive officer) that we will take away his licence. If he lays off even one worker, then we will take away his licence from him, that’s the easy way of laying him off,” Sata said.

The Zambian leader said his administration was aware that the mining firm wanted to use blackmail following the government’s decision to stop the export of copper concentrates.

A union representing the mining workers has since expressed concern over the decision by the mining giant to shed off some of its labour force, saying it was a sign of failure to run the mine.

“We are calling on government to quickly come in and investigate why the company is behaving in this manner. This is a sign of failure to run the mine because if it’s resorting to retrenchment then the future of the mine is not certain,” Mineworkers Union of Zambia president Nkole Chishimba told local media.

The mining firm has been at loggerheads with authorities in recent months following some of its unorthodox moves it has taken.
In June this year, the company was stopped from going ahead with its plan to lay off 2,000 workers due to what it described as low copper prices on the international market.

Last month, the company irked the government when it wanted to deduct from its workers’ money so that it could offset arrears it had accrued with the revenue collection authority in form of Pay As You Earn which it has not been remitting.

In 2010, the company was fined US$4,449 for having polluted a river on the Copperbelt Province. The company, which employs about 8,500 miners, produces about 2 million tonnes of copper ore per year.