The Plight of mine workers under the Mopani and Government on-going shareholding acquisition negotiations
Good morning ladies and gentlemen from the press. Welcome to today’s Press Briefing. The focus of this briefing is on the plight of the Zambian workers under Mopani Copper Mines – within the context of an anticipated take over of majority shareholding by the government owned ZCCM-IH.
- The Context
It is by now apparent that Zambia today has one of the most reckless and clueless governments on the African continent in as far as macro-economic policy is concerned. The PF government has, within a short period of time, pushed Zambia’s debt to unsustainable levels, hopelessly seen the Kwacha drastically depreciate and set the economy on an inflationary path. As things stand today, and of course using COVID-19 as a scapegoat, the country is entering the first stages of debt default.
Ladies and gentlemen, Zambia has three outstanding Eurobonds totalling $3 billion. Yesterday, the PF Government launched a vote with its Eurobond holders, proposing to defer interest payments on these three dollar-denominated bonds until April 14, 2021. This is supposed to be a first step to provide the country the necessary “breathing time” to create space for debt sustainability analysis and restructuring! In plain language, the country is unable to pay!
If you are a mineworker at Mopani, your question will be, where is this government going to find money to buy the shares owned today by Glencore – the majority shareholding in Mopani? Indeed the picture is gloomy:
- The PF Government is clueless as to where the money for the first repayment of $750m Eurobond in September 2022 is going to come from.
- In July this year, the IMF completed a virtual mission to Zambia to discuss the country’s request for emergency support. We do not see this support forthcoming given the lukewarm, arrogant and corrupt path followed to date on fiscal policy and consolidation.
- With the 2021 general elections near, fiscal consolidation will mean losing votes. The experience of 2016 teaches us that the PF government will not sacrifice votes for the sake of macro-economic stability. They would rather default on debt payments and loose access to the international finance markets than surrender their parasitic hold on the taxpayer’s money.
- The Mopani saga As you might all be aware, Glencore is the majority owner of Mopani Copper Mines, with a 73.1% stake, the Canadian concern First Quantum Minerals owns 16.9%, and ZCCM-IH owns 10%. The Zambian government, through ZCCM-IH, submitted an expression of interest to acquire additional shares in Mopani Copper Mines and Glencore had given its approval to this move. In other words, Glencore is ready and willing to give up all its assets in Zambia. Depending on how this is negotiated, this could amount to anything between USD800 million to 1.500 billion! Again, where will this money come from?
Recently, the government announced that it had constituted a team to liaise with ZCCM-IH for the negotiations with Glencore and also that ZCCM-IH was in the process of engaging a transaction advisor.
Ladies and gentlemen, let us remind ourselves as to what has transpired in the recent past:
- International civil society organisations have for years often accused Mopani of exploiting Zambia and not paying its dues tax obligations.
- In April 2020 Glencore announced that it planned to halt operations at Mopani, and place the mine on care and maintenance. The Zambian government reacted angrily to this, claiming that they had not been given ample notice. A threat was made to revoke Glencore’s licence in the country.
- In May 2020 Mopani announced that it would resume operations for 90 days.
- On 20 May 2020, the Supreme Court ruled in favour of the Zambia Revenue Authority (ZRA) in a long running tax dispute with Mopani. The ruling ordered that Mopani pay a total of K240million in taxes assessed for the 2006/07, 2007/08 and 2009/10 tax years within 30 days, bringing to an end a dispute that has been running since 2010. It was brought to light that Mopani had under-priced copper sold to its shareholder company Glencore International AG (GIAG), thus reducing its tax liability.
Mopani is not to be trusted. Neither can the workers trust their own Zambian government!
- The Plight of the workers
Since Mopani was placed under care and maintenance, we have about 9,000 workers that are without employment. Their families are today enduring extreme hardships and poverty. The government has paid lip services to their plight – but nothing much beyond that.
We have another 11,000 employees serving under contractors. Their situation is also becoming acute by the day. Pay cuts are not uncommon.
Then we have about 6, 000 direct employees under Mopani whose future is now uncertain. Glencore is not investing in its Zambia assets anymore. The operations have to sustain themselves. Under this context, the services to employees have been drastically curtailed. This is often done without consultations and warning.
Similarly, the negotiations between Government and Glencore have to date excluded management and workers. The mineworkers are once more, like during the privatisation process, treated as collateral damage not worthy consulting.
This is the real plight of the workers. A crooked multinational corporation and a corrupt, clueless government are deciding upon their future. The workers are not on the negotiating table. They are not appreciated. These negotiations are therefore not about them. Quite to the contrary, they are against them.
- Demands for the workers
The Socialist Party, in its understanding, as a workers party, demands the following on behalf of the affected Mopani workers:
- All workers should be paid their outstanding dues and benefits upon ZCCM-IH taking over majority shareholding from Glencore.
- No workers’ dues and benefits should be held in Trust for the workers.
- Former employees of ZCCM under Mukuba Pension Scheme would also need to be paid out what is owned to them. The whole pension scheme for miners is turning out to be a huge drain for the workers and not helping out to sustain their livelihoods after employment.
- New contracts will need to be signed for all workers upon a fundamental shift in the shareholding structure.
- Mineworkers and management must be represented in the negotiations between Government and Glencore
By: The General Secretary, Dr. Cosmas Musumali
Socialist Party Office, Kawama, Kitwe