Job loses have begun on the mines, despite Mwanakatwe’s promise

On January 29, 2019, Konkola Copper Mines, through its Corporate Affairs General Manager Eugene Chungu, released a very suspicious statement which puzzled us. It puzzled us because it was on government headed paper with a superimposed KCM logo. It contained an assuring message to government and citizens at large that the mining giant was not going to lay off any single employee as a result of the new mining tax policy.

Below is what we were told, that the KCM acting Chief Executive Officer Venkatesan Giridhar promised miners who work for Konkola Copper Mines and its contractors in Chingola, Chililabombwe, Kitwe and Nampundwe:

KCM Boss: “I wish to confirm, therefore, that THERE WILL BE NO LOSS OF JOBS AT OUR SITES as a result of the new tax regime. As KCM, we undertake to constructively engage key stakeholders such as the Government, trade unions, the media, local communities, and our shareholders, in a respectful manner to ensure that we contribute to the growth of the economy on a sustained basis.”

What was mind-boggling about this statement was that it was coming from the Ministry of Finance and not the mining company. It was not Mr Chungu from KCM who issued the statement, but the Ministry spokesperson Mr Chileshe Kandeta. There was no audio supporting the words spoken by Mr Venkatesan Giridhar.

We wondered why the words “THERE WILL BE NO LOSS OF JOBS AT OUR SITES” were in capital letters on the statement; did the KCM boss shout out these words louder than everything else he said for the ministry to cap them? Or was the ministry trying the emphasise the impossibility of KCM and it’s contractors laying off workers? We had serious suspicions.

But of course, we had no reason to doubt the authenticity of a press statement that comes through the official communication channels of the most sensitive government ministry. So we published the story quoting the assurances from the mine and government officials. But at the back of our minds, we suspected that there must have been some arm-twisting involved. We felt that the statement was attuned to give an impression that KCM was very supporting of the new mining tax regime, and it was capable of keeping it’s mining operations in full swing without any need to scale back production and workforce.

Today, our suspicions have been proved right. Barely two months later, KCM and its contractors have released their own sincere statement, giving a real picture of the situation on the Copperbelt.

“We wish to inform all our employees that in the last few months, KCM has not been able to pay Master Mine Services according to the conditions of the contract. As a result, KCM is owing the company huge amounts of money. Thus, it has become difficult for the company to continue running the project. The company is not able to source any more funds to sustain the project. Therefore, operations at Master Mine Service-KCM project have been suspended until further notice,” read only selected employees for care and maintenance will continue reporting for work. During this period, employees will proceed on leave according to the accrued leave days. Upon exhausting the accrued leave days, an employee will automatically be placed on forced leave (unpaid leave) in the event that operations do not resume,” read the statement signed by Master Mine Service project manager Ma Yun Liang dated March 11, 2019.

For those who have difficulties understanding the link between KCM and this company called Master Mine Services; this is a Chinese run mining contractor that is contracted to mine KCM’s No.1 Shaft also called No.4 Shaft Complex. These companies mine copper on behalf of KCM, and KCM pays them to pay the miners. These are the workers who have been declared redundant in essence, because KCM has been unable to pay its contractor.

In simpler English, the KCM contractor is announcing a lay off process to these miners who were assured by the Ministry of Finance that there would be nothing of that sort under the new mining tax regime. Government and KCM can come up with various complicated explanations to distance themselves from this development, but the simple truth is that jobs have been lost at KCM in Chililabombwe, one of the sites that were declared job secure.

We feel, for every job that is lost on the mines under such circumstances, government must take responsibility. If mining stakeholders agreed that they would not lay off any employee, then the Ministry of Finance must issue an explanation why this is happening. They must face the laid off workers and give them reasons why they should have confidence in this government.

We are not writing this to eulogize KCM or to portray them as victims. We know that the mining company is also a master at manipulating workers, and arm-twisting government. We know, for example that KCM has been importing unprecedented quantities of ore from DRC to process in its smelter. They have increased this cheap import and stopped investing in mine capital development. Thus, they are focusing more on being a processing company instead of being a mining company as per its primary license.

So, there is no doubt that KCM problems go beyond the new mining tax regime. But our concern is that government is failing to secure mining jobs, beyond just issuing statements. They want people to believe that government will be there to provide job security, when in fact they don’t have ground presence to monitor accountability.

One thing the PF must know is that for every job that is lost, there are hundreds of extended family beneficiaries who get affected. Today its just one mining shaft at KCM that has been shut down, tomorrow it will be two and three. Before we know it, other mining companies will follow suit and start kicking out workers. In the end, it’s the poor struggling families that suffer while those who were issuing meaningless statements continue to drink mineral water in air-conditioned offices. What a shame!

         

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