THE Association of Mine Suppliers and Contractors (AMSC) says it is disappointed with the delay by the Ministry of Justice to sign a the statutory Instrument on local content which will prioritise Zambian suppliers and contractors in the mining sector.
And AMSC says the takeover of Mopani Copper Mines by government will allow the proceeds from the copper sales to be channeled back into the country.
Meanwhile, AMSC has predicted an increase in copper production to one million tonnes of finished copper in 2021.
In a statement, Tuesday, AMSC president Augustine Mubanga said the association was disappointed in the manner in which the Ministry of Justice had held on to the SI while Zambian suppliers and contractors continued to be discriminated in the awarding of businesses in the Mining Sector.
“The Association is very disappointed at the manner the Ministry of Justice has held on to the SI while Zambian suppliers and contractors continue to be discriminated in the awarding of business in the Mining Sector. Brief background is that the Ministry of Mines and Mineral Development has done its part by proposing the SI that was forwarded to the Ministry of Justice. It is the Ministry of Justice and the Business regulatory agency who are delaying the release of the SI or signing,” Mubanga said.
“Our question, whose interests are they serving? We are tired of excuses from people who do not want to save the nation. We have had several meetings with the Minister of Mines and his PS who have even lost the steam they had on this SI. We are appealing to His Excellency to intervene in this matter. Suppliers and contractors are very worried on why other laws do not take time for to be assented. But this one Kaya Lusengo lwambwa.We don’t Know why the fear. However, We fully support his Excellency, President Edgar Chagwa Lungu on his observation that patriotic citizens rightly declare and pay tax. This is why the association is pushing for quick signing of the SI so that as many patriotic Citizens access business opportunity they will be paying taxes.”
And Mubanga said the takeover of Mopani by goverment would benefit the country in many ways.
“The association strongly believes that whether we liked it or not Glencore had no intentions to continue running the mining giant Mopani copper mines, even if government offered not to collect any taxes from them. Now is the decision made by government the best of all? Government through ZCCM- IH made the right decision to take 100% control of the running of Mopani. This decision will bring about the following benefits; more than 15,000 employees have been saved from being laid off. When we say 15,000 we are not talking about Mopani employees, suppliers, and contractors only, we are including other companies who are depending on the operations of Mopani such as Copperbelt Energy Corporation who have signed a 20-year power supply agreement, the Council etc. This move is a commendable move by government. As an Association, we fully support the move for it comes with many benefits,” Mubanga said.
“The Association is convinced that this take over will allow the proceeds from the copper sales to be channeled back home, this will have a significant effect on our local unit the Kwacha in terms of its strength. We are hopeful that this move, once the copper sales proceeds begin to be channeled back home, this will increase liquidity in our banks, which will result in enough money for lending to SMEs at lower rates. This technically will have an effect on the economy. Moreover, the drive by government to use the mining sector in the economic recovery plan agenda will make sense. The takeover offers an opportunity for the government to have full participation in the running of the mines and this will offer us a chance to assess the cost of production as reported by other mines. Technically this will allow for cross checking and assist in revenue collection projection.”
He added the unbundling of Konkola Copper Mine KCM would attract efficiency, increased productivity, and full utilisation of the mine assets including its human capital.
“‘By government directly participating in the Mining activities, it will assist in refining policy to support the sector and remove bottlenecks that hinder the growth of the sector. Having pointed out the benefits that we envisage from this 100% takeover, we would like to put it on record that the association has been advocating for the government to increase its stake in some of these mines and that Zambia has qualified human capital to professionally run these mines. We do have confidence in the current Management at Mopani to turn around the mine,” he stated.
“The Association has welcomed the decision by the provisional liquidator to unbundle Konkola Copper Mines PLC. In the Last 4 years, KCM has not received any capital injection to its operations, this resulted into accumulating huge liabilities and consequently we ended up into the liquidation of the Mine. Due to non-recapitalization, we feel that the unbundling of the Mine will attract efficiency, increased productivity, and full utilisation of the mine assets including its human capital.In the similar vein, we welcome the High Court’s decision to throw away the stay and allow the Provisional liquidator to continue with his mandate to reorganize the Mine. It’s in the national best interest to keep Konkola Copper Mines running and productive as opposed to keep the mining giant under utilised. This move will continue to assure business opportunities to all suppliers and contractors.”
Mubanga said the association was concerned with the continued status of Chambeshi Metals which was still on care and maintenance.
He called on government to issue a one month ultimatum to the investor to reopen the mine or declare the investor as an hostile investor.
Meanwhile Mubanga predicted an increase in copper production to one million tonnes of finished copper in 2021.
” The Association is expecting an increase in copper production to one million tonnes of finished copper driven by the high copper prices on the LME market; and the increase in production by Mopani Copper Mines and the unbundling of KCM will drive the increase in production. If Chambeshi Metals comes into operation, it will be an added advantage,” stated Mubanga.
“We also expect that with the signing of the SI, this will increase local company participation in the procurement value chain. We anticipate that government will initiate conversation with the sector stakeholders in the mining sector in order to promote dialogue as a way of finding solutions and stimulate mining sectors’ contribution to the economy. This is against the pronouncement by his Excellency President Edgar Chagwa Lungu to use the Mining sector as a driver to economic recovery.”
Mubanga also said the association was worried about the current state of the economy and called on government to manage the free falling of the Kwacha.