Lunshya copper mines (LCM) one of the foreign owned mine

The Center for Policy Dialogue (CPD) has said that there is nothing wrong with nationalizing the companies such as the mines in the country as long as they are able to run profitably.

CDP executive Director Dr. Neo Simutanyi told QFM news that the government should also consider owning its own mining companies alongside those owned by the private investors.

Dr. Simutanyi observed that the state can manage to own and run the mines only if they adhered to strict business principles.

He added that there is need for the state to discuss and review issues surrounding the current ownership of the mining industries in the country.

Dr. Simutanyi noted that there was the need to address the externalizing of profits by the foreign investors adding that there is also need for the government to increase the stake in the in the mining industry.

He also added that the mines should be keeping their money in the Zambian banks to ensure that the money is used in the country’s economy.

Yesterday some of the panelists who appeared on the BBC world Debate programme in Lusaka observed that the Zambian government was getting a raw deal from the proceeds of the mines.

However, the Zambian government objected to suggestions that there was need for nationalization of the mines saying nationalization would cause the mines to crumble.

QFM

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44 COMMENTS

  1. The Zambian government never ceases to amaze me…they are like those people who are prescribed with cheaper but effective medicine and yet they opt for the more expensive and unreliable ones until on their death-beds. Everyone with the right senses know that we are being fleeced by these investors because: 1. They externalise all the proceeds from copper sales, meaning other economies record income and we don’t, 2. The falsify their costs in order to adjust their profits and pay less tax, 3. They destroy our roads with heavy equipment which the Gvt has to repair at great cost, 4. The destroy the environment through pollution of air and rivers making our citizens perpetual sick people, 5. thier workers are paid peanuts, no quality job creation, 6. local suppliers are given small orders

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  2. #1 contd…6. local suppliers are given small orders of which even payments are delayed,
    7. people in rural areas are displaced from their fertile agricultural lands, yet jobs created are not even for the local people….i am sure others can add some more but really when someone refuses to EQUITABLY tax these mining houses in order to mitigate all the social and economic disparities they create as listed above, then you start to wonder whether this Govt is ours or its for foreigners.

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  3. Well what do you expect from leaders that can’t see beyond their noses!!!!

    The other problem, is we have FAILED LAMENTABLY TO TRANSLATE EDUCATION INTO PRODUCTIVITY, simply becoz, a situation has been allowed to develop whereby, EDUCATION HAS BEEN MARGINALISED to THE EXTENT MAJORITY are uneducated, LEADING TO A MINORITY OF “PRETENDING TO BE EDUCATED GOONS” maintaining a status quo of manipulation, fuelled by GREED. THE EDUCATED OF THE LAST TWO GENERATIONS have let us down, BY GOING WITH THE FLOW, rather THAN RELYING ON THEIR EDUCATED JUDGMENT.
    For as long as we have SPINELESS GOONS wielding power, WE WILL NEVER REAP THE PROFITS OF OUR RESOURCES!!

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  4. I agree with the good doctor on this issue. The problem we had in the past was political interference in the running of ZCCM. Otherwise had it been allowed to run like a normal business, it would have been another story. In many countries certain non-profit companies are allowed to run for the sake of welfare. In SA, SAA does not make profit. ESKOM was in the red a few years ago. In Europe, the public transport companies do not make profit but are allowed to run. The idea sometimes is to create employment and improve the welfare of the people. We all know how the quality of life has dropped on the CB.
    Mining companies can run as corporate bodies with only the CEO being a political appointee. The rest of the employees can be professional people not appointed by politicians.

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  5. We all know that one of the biggest mistakes we made was to privatise ZCCM but history repeats itself & those who are ignorant of it suffer the consequences of its mistakes. I think the way forward is we get 51% shares back in mines, then after a while recreate ZCCM. Investors should be allowed to come in Zambia only when they are creating new companies. Poverty is a mind set. As long as we keep thinking mines should be run by foreigners, we are dead poor. Governments in the west invest in areas like transport, aviation etc not to make profits but to improve the welfare of people and to facilitate mobility for development. Lets not rush to get the mines back otherwise we will be like Bobby next door but lets get them all back systematically & politely. We’re Zambians we are smart.

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  6. 5 Maria,

    ” The problem we had in the past was political interference in the running of ZCCM. Otherwise had it been allowed to run like a normal business, it would have been another story ”

    What is needed is a constitutional separation of budgets and appointments of the powers of state: government from the state; the party in government from the government; executive, judiciary and parliament.

    Someone who wants to become a judge should do so by rising through the ranks of the judiciary, not appointment by the President. The same with civil servants. Civil service should be a career path, and it’s hierarchy completely divorced from MPs, the President, etc.

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  7. Then, you are going to see great things happen, because all of a sudden the parastatals can be run by the civil servants who rise through the ranks, and can never have technical positions filled with cadres or anyone receiving payback for political support.

    Neoliberals like to hold China and Taiwan up as examples of free trade success, what they don’t say is that in both booming economies, most businesses are state owned enterprises.

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  8. We should also think of recreating companies like Zambia Airways, UBZ because those companies were great, they had safety and professionalism in the way they were run unlike the rude young stars we see in these buses. One time when I was in Zambia years ago, this young conductor made a lady pay two fares because the lady was big, imagine that. He said, “Ha mummy, you are very fat, you have taken two seats so you will pay two fares.” They lady tried reasoning with the youngster but to no avail. Imagine calling a person fat in public, that is so despicable but maybe in Zambia this is acceptable, whereas over here, that is tantamount to an insult, you could go to court over that. I know this has nothing to do with the article but it’s just an example of abuse in the private sector.

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  9. Recently (2011!!!!!) the Namibia government established Epangelo Corporation, a national mining company, and declared several minerals strategic assets so that the nation can benefit from them. Further afield, with the financial crisis, a number of American and British banks and mortgage lenders were nationalised to protect them against collapse which would have had a domino effect on the socio-economic wellbeing of those societies. Northern Rock in Ireland is only just being re-privatised because it is out of danger. In Zambia we liquidate instead of protecting; we give tax holidays instead of declaring strategic interest… the rot goes on with people who got degrees 50 years ago and have nothing to show for it!!! Atase!

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  10. It’s better the Mines are nationalised, that way we will have maximum benefits coming out from the wasting resource. The current setup is not making any sense as we are loosing more than were getting. With nationalised Mines we will have our brother and sisters supplying to the Mines and our brothers and sisters getting employed and not these Chinese and Indians

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  11. If my memory serves me right, we have been thru these cycles before…. Nationalise, de-nationalise so on and so forth. Bright ideas guys above, till we again start yearning for de-nationalisation :-)

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  12. 6 Quantum,

    ” otherwise we will be like Bobby next door ”

    Most people don’t understand what happened in Zimbabwe. The Zimbabwean people are extremely brave, they have fought for their independence, and have paid a massive price for it. They had the misfortune of having 5% of the population being white, which allowed them to ‘opt out’ of the wind of change.

    When Tony Blair reneged on the obligations entered into by previous conservative governments to pay white farmers compensation for the value of the land, the ZANU-PF did what not MMD government ever would, which is to go it alone, and not depend on the IMF/World Bank to tell them what to do.

    Remember that 1% of the population owned 47% of the country, 70% of the high rainfall areas. This is what they took back.

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  13. (2) For this, they were punished by a government that wasn’t even in power during the first year of Fast Track, the criminal Bush Administration, which killed far more people in Iraq (upto 1,000,000) than the ZANU-PF is even accused of during the 1980s (20,000, which is inflated – the Catholic Commission for Justice and Peace in Zimbabwe put it at 3,000 to 6,000).

    They punished Zimbabwe by freezing it’s lines of credit at international financial institutions, forcing them to operate on a cash only basis, print a lot of cash, which led to world record hyperinflation.

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  14. (3) This hyperinflation was also caused by ‘solidarity’ shown by British and US companies in Zimbabwe, which cranked up their prices in Zimbabwe dollars only (prices in US dollars were pretty standard by international standards), and even closed ATMs before the elections.

    If you look for any negative impact of Fast Track on macro-economic data before sanctions (Jan. 1 2002 onwards), it is non-existent. There even was an increase in tobacco exports in US dollars in 2001, up from 2000.

    It is the success of nationalisation that the West sougth to punish and prevent, because they want to keep control over our economies and governments. However, now there is talk of nationalisation in South Africa – against which THEY CANNOT RETALIATE.

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  15. (4) You see, 60% of the world’s gold and 90% of the worlds diamonds come from South Africa and Botwana. If they destroyed their economy, they would destroy the world economy, by making new gold and diamonds unavailable, causing massive inflation of the gold price. (On the other hand, that would be profitable too.)

    The key is that 90% of the world’s diamonds are mined and traded (controlled) by Anglo-American De Beers, founded by the Oppenheimer family, now controlled by the closely associated Rothsschild family. The oppenheimers are billionaires, but the Rothschilds are trillionaires.

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  16. There are two documentaries that one should check out on Youtube – The Diamond Empire, from 1994. And the recent Mining For Change (trailer only, so far), that has interviews/opinions from both Julius Malema and Nicky Oppenheimer.

    There is a lot of talk going on about nationalisation in South Africa itself, and Julius Malema is at the forefront, so keep an eye on him. And support him.

    Personally I think that trying to tax the profits of transnational corporations was a hare brained idea to begin with. There are too many ways they can hide profits and inflate costs.

    There is a point when we have to stop blaming the shortcomings of the ZRA, and use a tax collection model that fits with our ability to collect – or just own the mines outright.

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  17. Africans we can’t run such a big congramorate of mining companies. The biggest problem is neopatrimonism. Those in the leadership positions will ensure that all their relatives are employed regardless of their qualifications. Usually parastatals are play ground for politicians in terms of employment for party cadres and thats what killed good companies such as Zambian Airways and ZCCM. It was common in companies like Zambia Airways to find a mother father and children operating in the same office.

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  18. The G.R.Z.  can’t organise a piss up in a brewery! let alone run a mine. Copper is at a peak! therefore Zambia should be rolling in it (cash) but due to a few bad apples Zambia will remain a third world country despite the vast amount of wealth it contains. Let them privatise everything for more back handers. Sickening to know it goes on and there ain’t a damn thing we can do about it.
    It would have been  different if whites lived in Zambia, There would be nice roads, infrastucture in place, good school (free), good hospitals (free) less poverty etc. Most of you know what i’m talking about. Take a look at western countries and learn! 

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  19. MrK #13 – 17 that is as articulate as it goes; I couldn’t put it any better myself. In fact one of the shortcomings of our systems is to ape the hip word or trend. It is bewildering to an average Zambian to imagine countries like England or the USA nationalising their concerns, because we were told that privatisation is the best way to run affairs (government must not do business but facilitate an ‘enabling’ environment, they said). And yet, a short stretch from the nationalisation table you have huge corporates from abroad backed by their governments coming in to take over our parastatals in the name of ‘privatisation’… Just as MrK has articulated on Zimbabwe, we must guard against handing over our nationalisation to another nation in the name of privatisation!

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  20. When copper prices fall back to US$2000 per tonne the all talk about nationalisation will be all over…. you all sounf clever because the price is up. Where will GRZ get the billions required to develop the mines when the prices of copper is done? Companies go back to their shareholders for injection of additional capital, where will GRZ go?
    Its so amazing how every Zambian has become an expert on mining and its economics… including this ignorant DR

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  21. No 17 for all the being so brave Zimbabweans put up…. today Zimbabwe
    1. Is the lowest on the human development index  No.169
    2. Average Zimbabwean is poor than Ethopia, Mozambique, Sudan, Haiti,  Gabon etc
    3. Zimababean qualifications are no longer recognised anywhere. (in fact final year students in medicine at university of zimbabwe now have to do the final study at UNZA school of medicine if the want a recognised qualification)
    4. Its the worst ever performance of an economy not at war since world war 2
    The list is endless. Conclusion….  Nothing to show for being brave.
    A country can have resources, as long as you do not have the capital to development the resources are worth nothing… this is the case with South Africa, Zambia, Zimbabwe. 

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  22. To day Zimbabwe is a slam

    1. Can not feed its self from being the bead basket of Africa
    2. Lectures at University of Zimbabwe hold a first degree
    3. The central bank is being liquidated
    4. A third of the country has power at anytime

    And you call that being brave

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  23. I have always disagreed with anyone who choses to privertise all the companies that is state owned.. that is selling your birthwright to those who donnot know you. in fact the sale of those asserts Zambia has lost out completly, DANLOP gone to Zimbabwe , KL Kafironda factory gone to south africa, most machinery ripped from zccm taken abroad. what a loss and all the copper gone to China including the poor soil, just to name but a few those thieves who tricked us are campaining for RB

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  24. 19 Pounds and pence,

    ” It would have been different if whites lived in Zambia, There would be nice roads, infrastucture in place, good school (free), good hospitals (free) less poverty etc. Most of you know what i’m talking about. Take a look at western countries and learn! ”

    And you and I would be living in ghettos or bantustans. Remember Apartheid or UDI? They were pretty good at hoarding the national revenues for themselves, weren’t they?

    Also, look at what is happening in Greece, for the very same reasons. The Greeks too had a neoliberal sellout government that got into bed with Goldman Sachs, and ‘invested’ in their toxic assets. And now they are trying to make pensioners pay for it. It is the same thing, the world over.

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  25. 21 The Engineer (Australia),

    ” When copper prices fall back to US$2000 per tonne the all talk about nationalisation will be all over…. ”

    Yes it will, because there will be no profits that can be made. But you know what, Equinox, First Quantum, they will leave for the very same reason. They won’t pay taxes or share profits (dividends) when times are good, when times are bad they can just pack up and go. Why would they stick around when they can’t make a profit? Are they Zambian, or Canadian and Australian?

    Is that really the economy you want? Because right now, there is the money to diversify the economy, if we have a government willing to collect it. Our future and our children’s and grandchildren’s future is at stake.

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  26. When did BHP-Billion, Vale, Rio Tinto leave Australia when commodity prices where low 12 years ago? When did the leave South Africa in 1997 when commodities were low? I worked there…

    You do not have facts for what you are saying… for years we made losses at BHP-Billiton in South Africa due to low commodity prices. Shareholders had to put in money for the company to be a going concern…  tell me were GRZ will get the money when the mines will be making losses is my question? You will again run back to the same mining companies to take the mines back….

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  27. Ladies & gentlemen let sata win. We need our mines back. ZCCM is there to take over. We need to develop our country from our resources not careless borrowing. Let grub the mines from these thugs who are making a killing out of copper when Zambians are dying of hunger. Dear Zambians lets vote for sata so that he grubs the mines. There is no normal person who gives a neigbour his cooking pot and each time he wants to cook he goes to the neigbour to plead for his own pots. We need the mines back.

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  28. DR Simutanyi, with all due respect, which planet are you living on? The reason we privatised the mines is precisely because government CANNOT run business. The world over governments are getting away from running business, in developed countries governments have even gone further to sub-contract a lot of public services to private business. Sometimes when you do not have anything sensible to say, just sit quietly – we will still know you are still there!. Just shut up.

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  29. If you Zambians have a problem with foreign ownership of companies, then you should probably reduce on praying to God for your economic woes and reduce on drinking as well, and instead get busy working hard and set up your own companies. What you are engaging in right now is pure jealousy and senseless nationalism.

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  30. Nationalization would cause the mines to crumble. We have evidence of this by simply looking at what happened to ZCCM. South Africa’s mines are run by the private sector and they are very efficient and stable. Nationalization would be a curse Zambia should not reconsider. We already tried nationalization under ZCCM and it failed terribly.

    The Mining industry is not an easy industry. It requires certain form of expertise which only the private sector is efficient on. Zambia’s mining industry is functioning once again because of the private sector. Today we can even debate the issues of mining taxes because the industry is function. It is different from the ZCCM days were the govt was borrowing to keep the mines going. We should not nationalize anything. It’ll kill the industry.

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  31. @ kunta-Kinte: There is a difference between running a business and owning a business. What the good doctor is referring to is owning and not running. Running should be left to professionals chosen from the best people in the field. I do not see why a government owned mine in Zambia can not let the mine be run by the best Zambian and foreign experts. What is required is a paradigm shift in the way we Zambians look at management of mining and other strategic industries. I have worked for government owned companies that do have the flavor of a private company and run by the best people. Let me give you an example: Vatenfall is Europe’s biggest producer of heat and electricity. It is owned by the Swedish government. Some of the executives have worked for Motorola, Microsoft and so on.

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  32. We cannot continue doing the same thing over and over again and expect different results. If you cook nshima the same way, it’ll always turn out the same. You cannot expect it to turn out different.

    Nationalization will kill the economy. Canada, Australia, South Africa all have viable and sustainable mining industries because they are private sector run. Zambians are all too familiar with the damage ZCCM caused to the economy. In 1991, we were saddled with a US $7 billion debt because like Engineer has stated, govt had to borrow to keep the mines running.

    Zambians should be careful not to listen to people who want to ruin the country. We must not listen to people who hate the country and who want to see it ruined. Nationalization failed.

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  33. 33 Mr. Capitalist – 3 E’s steering economic growth,

    ” We cannot continue doing the same thing over and over again and expect different results. ”

    And…

    ” Nationalization will kill the economy. ”

    That is ironic, because what we have been trying over and over again for the last 20 YEARS, has been privatisation. So nationalisation would be ‘something different’, and not the same thing over and over again.

    I think you’ve just run out of arguments.

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  34. These debates on nationalising then privatizing then, nationalising then privatizing etc… reminds me of the familiar THE STORY OF FATHER, SON AND A DONKEY ON A JOURNEY
    The father sat on the donkey and the boy preferred to walk. As they traveled, on-lookers said: “How terrible. A big strong man like that riding while the poor boy has to walk.”
    So the father got off and he let the boy ride. Then people said: “How disrespectful. The father walks while his son rides.”
    So they both got on the back of the donkey. And then people said: “How cruel. Two people riding on that poor donkeys back.”
    So they both got off the donkey and started walking on foot. People said: “How foolish. Both of them walk while a perfectly healthy donkey has nothing on his back.”

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  35. We tried Nationalization for 20 years during the ZCCM days and the economy stagnated to the point that we were saddled with a US $7 Billion dollar debt.

    We have tried Capitalism and privatization for 20 years and the economy is moving. In fact it is posting positive growth.

    In short, going back to Nationalization would be going back to a system that does not work. A system that will kill the economy. It is better we stick to what is working. Capitalism is working. It has has worked for hundreds of years. We must therefore stick to what works. Why go back to a system we know with evidence, that it does not work and expect different results. It does not make sense.

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  36. This is the best group of contributors on LT in years, first four guys great job. Even the capitalist had knowledge today. Let’s end the goodness here before the clowns arrive.

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  37. The govt should come up with a piece law that will compel the mines and other business houses to bank all proceeds from their activities with the local banks. The country is recording high earnings from copper yet the Kwacha keeps on depreciating against the US Dollar and other major currencies. If the dollars being sung about were banked with the local banks the economy will grow alot. What is BOZ/Ministry of Finance doing about this stupid behaviour by the mining houses especially.

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  38. Zedians ignore the pro Mugabe rantings of MrK. This guy has one parent from Zimbabwe. His parents are Mugabe supporters and are beneficiaries of Mugabe’s murderous land grab. His parents are now proud owners of two farms. Zimbabwe should never be used as a formula in solving Zambian economic issues. Ignore MrK. He is a cheap Mugabe propagandist. I wouldnt even advise anyone to read his blog!

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  39. Contd from #35 …..and so on the scenarios kept changing along the journey. The last they were heard of father and son were carrying the donkey!! In other words, by now we should know that NO ONE SIZE FITS ALL and start thinking outside the box. i.e. focus on bringing about secondary copper industries within Zambia. It’s a question of changing our mindset and treating copper predominantly as OUR raw material. The fact is our Country will not prosper just from the proceeds of copper sales alone, no matter who is riding the donkey.

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