Mine suppliers on the Copperbelt have complained over the 40 per cent discount announced by Konkola Copper Mine (KCM) early this week for every order given to suppliers.
Speaking in an interview with ZANIS in Ndola today, one of the suppliers, Thomas Banda, who is also proprietor of Honanda Zambia Limited, said the move will make the local suppliers unprofitable because they bear a lot of costs in purchasing mining equipment which they supply because they order almost all the equipment from outside the country.
Mr Banda called on government to intervene on the matter to ensure that local suppliers can benefit from the mining industry.
He said the move seems to be one of the company’s ways of cushioning the impact of the dropping copper priceS on the international market and the global financial crisis on it.
Mr Banda noted that it would be unfair for KCM to directly transfer the negative impact of the business crisis to suppliers who are already struggling in business.
He further observed that the major mining companies on the Copperbelt rarely gave orders to local suppliers in preference to foreign suppliers.
Early this week, KCM announced that it will demand a 40 per cent discount for a supply orders it awards to suppliers.
And Roan Constituency Patriotic Front Member of parliament, Chishimba Kambwili, yesterday strongly condemned the demand by KCM, as it would push the local suppliers out of business.
Copper prices on the international market have continued to spiral downwards with the price standing in the range of $4,000 to about $5,000 from about $8000 in the past few years.
The drop in the copper prices coupled with the global financial crisis is likely to affect the operations of the mines and force them to make desperate operational adjustments for them to continue making prices.