We have followed developments happening at Mopani Copper Mines from the time CEC restricted electricity supply to the firm. We have also taken keen interest to understand the arguments from government, those in the ruling Patriotic Front, CEC and indeed Mopani. Our observation is that stakeholders are not paying attention to the cause of this impasse.
CEC is wondering why Mopani is the only customer refusing to pay the 2017 industrywide tariff.
“The action to restrict supply was necessitated by MCM’s refusal to accept the 2017 tariff increment despite negotiations that began in November 2016. To date, MCM remains the only CEC customer refusing to pay the 2017 industry wide tariff. CEC wishes to state that under the Power Supply Agreement (PSA) with MCM, there is provision for negotiated and industrywide tariff revisions,” stated CEC.
But Mopani is saying the decision was made without notice, contrary to the provisions of the same Power Supply Agreement.
“We are operating under a Power Supply Agreement dated 31st March 2000, recently amended on 6th March 2015, and is valid until 2040. The PSA strictly sets out the agreed tariff and increases during the contract period. The contract provides that, ‘a tariff may be increased on agreement by both parties’. This was the case in 2008 when Mopani agreed to a tariff increase of 33% over and above the contractual tariff. The current proposed revision would result in a further increase of 54%. The dispute resolution steps have unfortunately not been followed by CEC, which instead chose to resolve the impasse by a unilateral restriction of power supply.”
Our observation is that Mopani is using the Power Supply Agreement as a scapegoat for doing what they have been intending to do for some time now. It seems the mining company has been wanting to cut its workforce for some time. This, in fact, is not the first time that Mopani is retrenching workers. The mining company pruned 4,000 workers in November 2015 under a debt reduction strategy following harsh economic times. Mopani doesn’t seem to have much left to do in Zambia, they are done with us, and they are looking for weaknesses in the government policies to justify their imminent exit. Mopani seems to have capitalized on the inconsistencies in the manner in which the PF government is managing the mining and energy sectors.
As for CEC, they have to wash their hands clean on this matter before the blame for impending job loses is lumped on them. We challenge CEC to go back to the Power Supply Agreement and see if indeed Mopani has no valid argument. If they do, let CEC clean the mess by renegotiating the terms for a win-win situation – for the sake of the workers.
Even if other mining companies who are party to the Power Supply Agreement have accepted the new tariffs, as claimed by CEC, it should not give the supplier impetus to breach the said agreement. Mopani is raising an issue which CEC and government need to address through intimidation-free negotiations; threatening them will not save 4,700 jobs.
We cannot afford to punish the poor miners for the ‘sins’ of the apamwambas who are fighting for capital. We say this because Mopani Copper Mines is not a charity organisation. They are not a bunch of Father Christmas clowns here to entertain jobless citizens. The owners of Mopani are in Zambia to do nothing else but make money. If they see that the cost of production is threatening their net profit, they will find every excuse in the book for exiting. When that happens, minister David Mabumba will not suffer, Victor Mundende at Zesco will not be affected and no one at the privately run CEC will lose sleep. It is the 4,700 workers who will feel the pain of losing jobs under these harsh economic times.
We strongly condemn the on-going showdown between government/CEC and Mopani because we are certain that it will end up forcing 4,700 miners to bear the consequences of poor planning by those in decision-making positions. Zambians have been begging government to be considerate when hiking prices of commodities and utility services, but no one cares to listen. We recall President Edgar Lungu even bragging in Livingstone that he will be happy to be fired in 2021 over ‘his’ wise decision to increase electricity tariffs. We can’t doubt President Lungu’s happiness by 2021 – considering that he made over K20 million after being in power for only 18 months. Our concern, however, is the happiness of the poor miners and their extended families.
Experts warned the PF government that increasing electricity tariffs without proper planning and without consulting the consumers would lead to catastrophe; they did not listen. PF has simply gifted Mopani a perfect excuse for creating job losses. These are the results of a government that does not listen.
We insist that we do not support the decision by Mopani to retrench workers. In fact, we encourage the 4,700 employees to do anything within the law to save their jobs; if protesting will amplify their cries for help, let them do so. But our view is that this standoff between CEC and Mopani could have been avoided. It saves as a warning to the PF government to stop playing politics with the economy. You cannot make such staggering increases in electricity tariffs at once and expect no repercussions. Mopani is just one company; we will not be surprised if another firm joins the dispute. Yes, mines are making a lot of money but lets tax them
without giving them opportunities to create sufferings among citizens.
It is not long ago when there was an outcry from domestic consumers after the 75 per cent electricity tariff hike was announced. Policy makers in government listened to people’s complaints like music in their car stereos and ignored. Now, however, Mopani has fired a warning shot; if nothing is done and those 4,700 voters lose jobs, bigger jobs will be lost in 2021.