Mopani has Crossed the Red Line by cutting 300 Contracts for Zambian Suppliers and Contractors

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GREEN Party Presidential Candidate Peter Sinkamba
GREEN Party Presidential Candidate Peter Sinkamba

By Peter Sinkamba

We as the Green Party believe Mopani Copper Mines (MCM) has now crossed the red line by cancelling 300 contracts for Zambian suppliers and contractors in addition to its planned retrenchment of 4,700 miners.

If Government has failed to veto the absurd MCM management through the Golden Share scheme, then it is high time that President Edgar Lungu invoked Emergency Powers Act to end the impunity of the company. Section 3 Regulation 2 of the Emergency Powers Act empowers the President to take over, on behalf of the Republic, any undertaking in an industry which has been declared a strategic industry by the President. Mines are classified as strategic industries, and therefore eligible for compulsory acquisition if the manner in which management of the mine is running the company is inimical to State security and national economy.

As the Green Party, we expect President Lungu to move in and deal with the issue of MCM personally. Parliament gave him the powers through the resolution which was overwhelmingly supported. Those power should not be only seen to used to harass ordinary citizens at markets and for loitering (shishita) purposes. The powers should be used for economic sabotage acts such as the MCM case which have more serious and widespread local, regional and national impacts.

It is pointless for the President to venture into shuttle diplomacy by sending his Ministers to MCM, when the company has shown serious disrespect for his government and the people of Zambia.

There is absolutely no reason for his government to continue pleading with Mopani, unless his government is compromised through state capture corruption. This level of corporate impunity by MCM only manifests when Government officials captured by the Company, whereby the ruling elite and powerful businessmen manipulate policy and influence rules of the game to their own advantage. A captured economy is thereby trapped in a vicious circle in which the policy and institutional reforms necessary to improve governance are undermined by collusion between powerful firms and state officials who extract substantial private gains from the absence of clear rule of law and interventions by government officials. At the end of the day, a small group of people is able to extract considerable profits from those distortions.

We believe government is in a state of capture because there is no excuse why MCM operations should not be compulsorily acquired.

First, this company, which has been operating for 17 years has not paid any dividends for the 20% government stake but keeping all profits to itself.

Second, this company has pruned workers from 30,000 at privatization in the year 2000 to 8,000 at the moment, and wants to reduce that further to 4,000.

Third, the company has been giving petty businesses to Zambian suppliers and contractors. The bulk of businesses are given to Peruvians and South Africans. Even for the petty businesses, 300 such contracts has been terminated.

Fourth, the company has hedged it copper sells at $3,000 per tonne. Even if the price of copper reaches $10,000 or more, Zambia will get nothing because the hedged $3,000 per tonne is less than the production cost of $4,000.

Fifth, the company is failing to pay for electricity and owes CEC $15 million yet it making a big kill from copper sales now fetching $6,500 per tonne. We the poor members of the public are paying even high cost reflective tariffs upfront through prepaid scheme. Why should a foreign firm making big profits fail to pay. The company wants to cling on to the so-called Power Supply Agreements which were cancelled by the late President Mwanawasa. Those agreements have no legal leg to lean on.

Sixth, the company owes the Zambian people more than $80 million in environmental liabilities which it has failed to cover through bank guarantees.

Seventh, the company has failed to provide key documents to ZRA to fully assess its VAT returns and and its copper sales, whereby civil society estimates indicate Zambian has been defrauded by the comapny in excess of $10 billion. The company denies but the only way it can be vindicated is to provide documentation in a transparent manner but is refusing to do so. Why should government continue tolerating such a fake company?

Eighth, this company was acquired from ZCCM “at a song” and not through a cash transaction but credit or “nkongole”. Government gave it tax exemptions running in hundreds of millions of dollars. Why should government fail to re-acquire it through similar fashion?

Ninenth, from company documents posted through the “Mopani Way” public relations, it appears this company plans to abandon operations in Zambia in 2023. Why should we wait until the copper reserves are exhausted?

Tenth, the multi-billion question then is: Why should a responsible government continue allowing a foreign company to rape natural resources to the extent of Mopani if it is not captured?

If the PF Government is not captured, we demand that the President moves in immediately to acquire the MCM assets forthwith. We also demand that all contracts for Peruvians and South Africans are cancelled forthwith. We finally demand that all work permits for MCM expatriates and contractors are cancelled forthwith.


President
Green Party of Zambia

29 COMMENTS

  1. +10
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    Good points raise by Mr Sinkamba. The government needs to intervene and not just leave the whole issue between Mopani and CEC.

    • +2
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      Nonsense; the problem is that of exporting power to SA while the country suffers load shedding! How do you expect to develop! No wonder Mopani has taken this stance over ridiculous electricity prices. Come on. SA hasnt has load shedding since 2009 because it is exported from Zed!!!!

      Wake up Zambia!!!! Get out of the dark ages….

  2. +5
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    Comment:
    Time to man up, Zambia. Time to do a Zimbabwe -style rebuttal to international manipulation, ney throttle.

  3. +6
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    Zambians are good at talking. The só called foreigners have providenciar Jobs for Zambians. You are good at talking figures, but forgeting that its extremely expensive to run underground mining operations. Mopani is among The mining companies paying suppliers one month on time regardless of The amount/imvoice. KCM, Lubambe are paying 90 days. Sinkamba dont look at the Cooper price, but operational costs vs monthly production. Drilling companies both for production and devekopment get paid huge chunk of money.

    Sinkamba why dont You open the mine and employ Zambians. Good at talking and you cant even employ 300 People. This is not politics, but business. This guys get loans and impliment, employ Zambians, but when Zambians get loans they destroy Peoples marriage, pregnant…

  4. +6
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    Mopani you useless gold diggers without any social responsibility. Just get out of Zambia
    Go to Canada. Zambia is a third world country so investors must know they have to contribute to development

    • +4
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      Investors do contribute to development. For your own information First Quantum Minerais have paid more than US $4billion in taxes to the Zambian govt and it’s part of the money paying the civil servants, Nurses, teachers, doctors, soldiers, police Just to mention a few and FQM is shareholder in Mopani. FQM does corporate social responsibility help community in farming, burseries to underprivilledge sponsors Zambian footbal team, bought Zambian coaches hiluX cars. It seems you are ignorant. FQM has employed Zambian graduates from our University. Shut your mouth if you dont know what you talking about

  5. +2
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    The HUGE PRICE WE ARE PAYING FOR OUR RECKLESS BEHAVIOR TOWARDS OUR OWN NATIONAL ASSETS!! We had all these mines under ZCCM BUT THE POLITICS OF OUR TIME denied technocrats to run them professionally. They ALMOST COLLAPSED, FOREIGNERS TOOK THEM OVER, and then what DO WE EXPECT FROM THEM-MERCY?? CHILE, THROUGH COLDECO runs a good number of its mines!!Mopani is doing all these since they KNOW THAT WE ZAMBIANS ARE INDISCIPLINE and UNPATRIOTIC, WE CAN’T RUN OUR OWN MINES!! Even if GRZ had takeover the mines, THEY WOULD BE RUN DOWN BY POLITICIANS, DESTROYERS OF OUR OWN EXISTENCE who appoint relatives,cadres and friends to run government entities they are not qualified to!! JUST LOOK AT WHAT HAS BEEN HAPPENING TO ZAMTEL, RAILWAYS,ZESCO etc..

    • +4
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      ZCCM was run under Kaunda, what did Kaunda do with the money which was made from our Cooper? ?? Kaunda has never built anything despite having 200%control of ZCCM. Kaunda never thought of building the roads and Kaunda never thought that one Day in Zambia there Will be so many cars in Zambian roads. Kaunda never built infraestructurasture, the same whites you are cadtigating are the same Who built the towns, roads, building we have in Zambia. In Kaunda regime no one knew about copper and it was only a few. .At least whites have a heart even if they are se stealing they Will build something tangible to see, but blacks will eat everything. Our só called learned ensinares technocrats couldn’t plan for infrastructure development for the next generation, but look at how whites built…

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      @SKIPPER, Sir are you seriously asking what Kaunda did with the money from the mines, then it means you are a young person who has little knowledge of history. The British used the money from Northern Rhodesia to build Salisbury, in Rhodesia. and left Zambia with a single lane Road from Livingstone to Copperbelt. All the Roads to provincial centres were built by Kaunda including the Tuta Road and 4Km bridge the longest in Africa. He built the Pipeline to Dar, the Refinery at Ndola and TAZARA to Dar. He built all the power stations in Zambia Including Kafue Gorge and Kariba North Bank. He found all Africans living in Kombons and built all the low density areas Rich Zambians live in. He found less then 10 secondary schools and built Secondary schools in all districts. When he took over no…

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      @SKIPPER cont… When Kaunda took over in ’64, no African woman could drive a motor vehicle. When he left, thousands were. There was no African pilot in 1964. When he left, we had hundreds of fighter pilots and jumbo jet Captains. But most important Kaunda handed over power and never ran away from his country like many African leaders. Because of him, all our past Presidents are in the country. He is not a rich man and his children are poor. Kaunda had his weaknesses. He overstayed. He spent considerable national resources on the freedom struggle in neighbouring countries. But he was genuine. He was a true hero.

    • +2
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      @SKIPPER…..cont..
      Sir, even with my little contribution above it does not do justice to Kaunda especially when you recall that he had less than 100 graduates in 1964 to work with. He built technical Colleges and two Universities. Of course even Mulungushi and Nkurumah were built by Kaunda. Kaunda built Nitrogen Chemicals to make fertilizer for our agriculture. He started Nakambala to produce sugar. He started Chilanga Cement.
      You will recall that Southern Sudan got their independence on 11th July 2011, and within 3 years they already in a deadly civil war. Kaunda’s major achievement is simply nation building. Even when we have had poor leadership, the country continues to hold together.
      I do not know who you think has built Zambia. I am really keen to find out.

    • +1
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      @ 6.2,6.3,6.4 Nkole .. THANK FOR EDUCATING THIS PERSON who is SO COLONIZED AND UNINFORMED IN HIS REASONING [email protected] Skipper..If you don’t know what KK did with copper money then YOU CAN NEVER SEE how the NEW MINE OWNERS HAVE SHORT CHANGED US! In fact my contribution was meant to say, HAD WE MANAGED OUR MINES WELL, WE WOULD’NT HAVE NEEDED THESE INVESTORS SO MUCH AS WE DO-THEY HAVE ADDED VERY LITTLE VALUE TO OUR ECONOMY COMPARED TO WHAT THEY GET OUT OF IT!! Mines were nationalized which was a good thing but government (politicians) were always interfering in their management, leading them to fail to run as businesses. For your own information, COLDECO of Chile, the largest copper conglomerate in the world is still a government company!!

  6. +4
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    Skipper and bwafyaa,

    You are the only two bloggers who are making sense here and I applaud you for making rational and objective contributions. The rest of the bloggers – including the author of the article, Peter Sinkamba – are just too emotional. None of them is even addressing the issue of the contract signed between Mopani and CEC. Just what are the contents of that contract? Who is in breach of the contract? We must remember that no investors would ever invest in a country where institutions arbitrarily and unilaterally breach contracts.

  7. vote

    I am wondering if this has been a deliberate ploy the government to acquire the mine the interests of the country.
    Mr A Chanda is qoted as saying that the president will act so the miners are protected. Could tbe government declare a full state of emergency and takeover the mine that way and blame Mopani for declaration of SOE

  8. vote

    Why should it take Mr. Peter Sinkamba of the Greens to bring out all these valid points yet we have highly educated people in Govt who are supposed to be giving good advise to our political leaders. There is nothing special about MCM to start threatening to lay off 4000 workers and doing away with 300 Zambian sub contractors. They are trying to make life difficult for the Zambian people and the govt. Time to act is now. If the authorities let MCM off the hook, by the time they pull out of the country they would have made their money and just leave behind huge holes in the ground. Let us not betray the future generations of our country. The situation should win win for both parties. The only way to deal with such cunning multi nationals is take them on punch for a punch.

    • 0
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      Muwerewere the só called workers when you employ them they have to be paid. How do you keep workers when you are not making money. You cant Just be paying workers from your pockets. You Just see the copper price picking and you are not considering operational costs. Typical Zambians good at talking and you cant employ People yourself

  9. vote

    Muntu wandi Sinkamba was lasa. Hopefully Lungu naunfwa. MCM should be shown the way out before it is too late

  10. +1
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    Don’t live in the political darkness about electricity sales. Zambia is the one buying power from South Africa not like S/africa buying power from Zambia absolutely fake New….Zambian themselves have found in these situations becouse they believe in lies not the truth even wen things are open to see in there two naked eyez to be horrible they pretend to see it correct then at last they cry.lady year wat really happened in the Copperbelt was jobloses they saw it but wat did they do they went on to vote on the lies why are they crying and for who?….open yo eyes and learn from the past… It’s a bad idea of axing jobs like seasons like this but also as Zambians we need to change our attitudes some times.

  11. +2
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    Your article Mr Sinkamba is misleading. I don’t expect a person at your level to spread such falsehoods. I have been following the Mopani story closely and have seen unforunately that their is a deliberate ploy by certain people to take advantage if the ignorant many to spread falsehood mainly aimed at creating hate towards Mopani.
    Firstly the Zambian govt does not own 20% shares in Mopani but 10% through ZCCM-IH. Maybe ZCCM-IH should explain how much dividends it has gotten from Mopani.
    Secondly being a private company Mopani does not have to employ all the 30,000 employees that ZCCM used to employ. If really it reduced labour from 30,000 that ZCCM used have to 8,000 could mean ZCCM was very inefficient. But also to consider is that whilst ZCCM used its workers to do all the jobs,…

  12. +1
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    I have been reading all the comments and appreciate the truth spoken by Ku M’mawa , Skipper , bwafyaa and Facts . Also consider this – the amounts invested in Zambia by companies operating in Zambia and specifically in Kitwe . If Mopani closes the mines /shafts how many more people will be affected ? Can you imagine ? It’s not just the mine employees that will be affected whether local Zambian people and their families or other, it will affect employees at other companies involved as well at the 300 ? Zambian contractors ,Shew !! I believe Zambia is a Christian nation ? Just pray then for a peaceful solution ! Work together for peace and stability , keep investors in the country . I love Zambia and just want to see progress .

  13. 0
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    Mupembe umfwa Milambo thanks for your contribution. Kaunda had no forsight and if indeed Kaunda had forsight as you claim he would have built much better infratrsture compared to what we see in Zambia. Look at the whites have built Américan cities, road network, Kaunda was running Zâmbia like his personal business. Like you have mebtioned liberalising beighbouring countries, but compare the infrastructure road network for those countries. Look at the houses in Wusakile township kitwe and other townships you claim Kaunda to have built. No visión totally, The same whites built the mines and Kaunda apokele pamaka. Kaunda run the ZCCM mines from 1964 -1991 where did he take the priceeds of Cooper? ? That was serious money and Kaunda was running Zambia with Iron fist. Kaunda is not poor same…

    • vote

      Mapembwe Umfwe Milandu, at That time things were very cheap and the mines where making serious money. At least the whites even if they Steel money you are able to see what they have built. Kaunda put money into UNIP thats why UNIP is run by his son and UNIP is the richest party ever in Zambia. Kaunda is not poor as you claim same as his children. Kaunda had no vision. The same whites built the Cooper mines and Kaunda apokele pamaka. Why did Kaunda build a single lane road instead of three lane roads and material was cheap and govt had money. Why did Kaunda built shanty compounds instead of decent houses? ? Kaunda never talked about ZCCM money and Zâmbians are knowing now about the mines. PanjI Kaunda had Lupenga Airlines is That poor and where did Panji Kaunda get his money?

    • vote

      @SKIPPER,
      I have made some assessment of what kind of information is available to you and I am afraid it can not be very accurate. But you may wish to know that Kenyatta ruled Kenya from 1963 to 1978 and the Kenyatta family is one of the richest in Kenya. In Botswana, the Khama family is probably the richest. In Cote d’ Ivore the Felix Houphouet Boigny family is one of the richest. What does Kaunda and his family have. As for UNIP even Chiluba refused to reposes its property apart from the Government Complex and Lusaka House which were taken away. What do they now have apart from the building in Cairo road. Kaunda is now 93 years old. Do you think he is hiding the money? For who? The Chiluba Government engaged investigators to trace any money Kaunda might be hiding. Chiluba was not a…

    • vote

      @SKIPPER cont.. ..Chiluba was not a dear friend of Kaunda. If Kaunda had any money hidden anywhere I am sure Chiluba would have made it public. The truth is he has no hidden money and his children are just ordinary people struggling to survive like all of us ordinary Zambians. We do not have to like Kaunda to accept facts. He spent Zambian money on free education, educating Zambians, over 90% of whom were illiterate in 1964. He spent it on building infrastructure all over the country. I lived in two houses on the Copperbelt built by the mines after independence. They were solid and of very good quality. Certainly better than those built before independence. Maintenance of the structures and environment has been very poor. Of course they have all been sold to sitting tenants since 2000.

  14. vote

    There is nothing we can do.As long as someone up there is eating hand outs.why is that such nonsense doesn’t happen in Botswana. Namibia and south Africa. Let the investors rule us since we don’t have rulers.

  15. vote

    At point four: Hedging is actually not a problem, since Zambia some years ago was clever enough to link the value of copper for tax purposes to the average world market price and excluding hedging from calculation of taxable income.

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