Vedanta Resources KCM retrenchment plans rejected

27.11.2013

The Mineworkers’ Union of Zambia (MUZ) has rejected plans by Konkola Copper Mines (KCM) owned by Vedanta Resources, to lay off 1,529 mineworkers in Zambia’s biggest mining company. IndustriALL condemns the company’s use of workers’ jobs as a bargaining chip.

The union had successfully opposed similar plans by KCM to lay off over 2,000 employees in June 2013. KCM cited the falling metal price, an increase in labour, power, input commodities costs and royalty taxes as the reason for wanting to retrench but on 1st November 2013, KCM gave new reasons for intending to retrench 1,529. KCM CEO Kishore Kumar said the move was in a bid to move towards mechanization and automation in view of decreased copper grades at some of its mines.

The Zambian President, Michael Sata has threatened to revoke KCMs mining license if it proceeds to lay off 1,529 employees. President Sata said he would not allow mining companies to blackmail government by threatening to lay off workers every time government introduced legislation meant to collect correct revenues from the mines. He said 49 years after independence; Zambia had survived on mineworkers’ Pay As You Earn (PAYE) tax and not what came from the mines.

Minister of Foreign Affairs Wilbur Simuusa says courageous decisions will have to be made by the government to protect jobs and end mismanagement of KCM by Vedanta that has resulted in high operational costs. He said a 10 man technical team that has been appointed by the government would highlight the wrongs in the operations of KCM and make recommendations on how to protect jobs, as well as make the company viable again. He further said KCM had the most demotivated workforce because of announcements of retrenchments and irregularities in the payroll system that had persistently rocked the mining company.

The MUZ General Secretary Joseph Chewe said the union would oppose the mining giant’s plans. He said KCM is similar to Mopani Copper Mines plc (MCM) which is run by Glencore Xtrata. MCM also inherited old mines but is sinking new shafts to extend the lifespan of the mines. KCM could not do the same.

The MUZ President Chishimba Nkole said Vedanta Resource had failed to run the mine and called on the Zambian government to bring in new investors. “KCM will never announce that it has failed. Our duty is to look at the signs and symptoms…are they taking us in the right direction? The writing is on the wall that KCM is no more. It is up to the Zambian government because as a union, we have done our best to bring to the attention of the government the activities of KCM management. KCM has shown all signs that they are unable to move the company forward,” he said.

KCM has over 7,000 permanent employees and a further 12,000 are employed in companies contracted by the Vedanta Resources owned mining giant.