The Luanshya Copper Mines (LCM) has dismissed allegations of an imminent closure and of selling its capital underground mining equipment in order to recover money invested in the mine.
A source within the mine, who sought anonymity, has alleged that the mine was selling its capital underground mining equipment because it was facing a looming close down.
The source told ZANIS in Luanshya that the mine had put a Chinese man in charge of the sale, what he termed as sinister since the accounts office was usually responsible for all company transactions.
He also claimed that LCM was forcing employees to take leave so as to exhaust their leave days to reduce on the employee termination packages once the company halts operations.
And Luanshya Mayor elect Nathan Chanda confirmed having heard the allegations and called on the Chinese investors to come out in the open about their doings.
Mr. Chanda said that if it was true that the Chinese investors were pulling out, it was wiser for them to come in the open as they did when they went to invest in the district.
He has since pledged to stand with the miners once he is installed into office and side with the people of Luanshya and ensure that the mining industry is protected.
But LCM Public Relations Manager Sydney Chileya dismissed the assertions saying the company was only undertaking one of its periodical auction sales adding that there was nothing sinister with the action.
“The company has not had an auction in the past seven years and what is obtaining is that the company every once in a while conducts an auction to get rid of company property that was not in use which includes light duty vehicles. And this time around we decided to include some of the equipment from our underground mines that was not operational,” Mr. Chileya explained.
He dismissed the allegations as baseless saying currently, Mulyashi mine, which is fully operational, was the financial backbone of the company adding that it would be suspicious if it closed down or reduced its operations.
Mr. Chileya further said the company was still fully operational and that there was no looming closure noting that the mine has not yet even started reaping profits from the invested money.
He explained that the Chinese Investor has invested about US$368 million borrowed money into the mine.
He pointed out that it would not make any business logic for the mine to pull out when it had only settled 75 percent of the investment loan.
Mr. Chileya further said it was not the first time that the mine was selling equipment, adding that LCM also sold some of its equipment when it was changing the old winders for the newly acquired ones in 2012.
He meanwhile explained that the company loses money on servicing equipment which was not in use since the time Baluba mine was put on care and maintenance.
He observed that not all machinery was still being used as copper production had also reduced.
Mr. Chileya added that if the copper prices on the international market stabilized and Baluba mine swings back into action, it would need to work efficiently.
He said this was the reason for offloading old equipment which will be replaced.
He indicated that even with the reopening of Baluba mines, not all equipment would be used as the copper production was diminishing since it was mined out.
And commenting on the exhausting of leave days, Mr. Chileya said it was a normal human resource exercise aimed at revitalizing and increasing worker productivity by allowing workers to rest.
He said the company was running two operations which are the Baluba underground mines that have been put on care and maintenance and the Mulyashi open pit mine which is fully operational.
Luanshya district has been dependent on mining and has suffered harsh financial setbacks from the closure of some mines.
Last year, over 1,600 miners were sent on forced leave when Baluba mine was put under care and maintenance.