Tuesday, 31 December 2019

Performance of Zambia’s Mining Sector in 2019

Action Aid protesting against some mine investors in 2019
By Paul Shalala 

2019 has been a challenging year for the mining sector in Zambia.

Africa’s second largest copper producer started the year with implementation of various government measures which were prescribed in the 2019 National Budget.

One of these was the 15 % tax imposed on imported copper concentrates.

This measure was meant to boost local production of copper concentrates which is a highly sought after product in the mines.

However, this measure was heavily opposed by the mining houses.

“This measure was done without consultation. It led to a situation were the sector thought government was fighting it. The measure brought problems for Chambishi Metals which ended up laying off some workers,” said Association of Mine Suppliers and Contractors of Zambia President Augustine Mubanga.

Secondly, the 2019 National Budget also brought in Sales tax.

This tax was brought in to replace Value Added Tax which had been in use for decades.

But due to heavy opposition from the mines, talks between government and stakeholders went on for almost the whole year.

Implementation of the tax was postponed two times and in the end, the Ministry of Finance ended up scrapping it off in the third quarter.

Mining, being a huge undertaking, has far reaching consequences on the environment.
A number of mine houses were caught off guard in this area in 2019.

For example, in March, Mopani Copper Mines was exposed for constructing an illegal tailings dam in the Nkana Tailings Complex in Kitwe.

Here, harmful products were being released into this tailings dam which was built without approval by authorities.

The illegal tailings dam was exposed when then Mines Permanent Secretary Paul Chanda toured the tailings complex and found Mopani workers discharging waste into the bush.

In anger, Mr Chanda threatened to take on the mining giant.

Inspectors found traces of harmful substances in the effluent and the mining firm was later fined by the Zambia Environmental Management Agency.

And in October, the Nchanga Acid Plant in Chingola released harmful substances into the environment.

Over 300 pupils at Nchanga Trust School and several KCM workers were hospitalized.
This was after a power surge.

“The other issue which was topical in 2019 in the area of the environment is the debate on the opening of a mine in the South Luangwa National Park. The sad part is that the mine life span is seven years. Now look at seven years and what impact mining will do on the ecosystem to mine for only those few years,” said Lovemore Muma, an environmentalist who runs The Earth Organisation.

But the biggest of all the 2019 mining stories was the takeover of Konkola Copper Mines by the ZCCM-IH, a government congolomerate which has stakes in several mines.

KCM is the largest employer in the mining sector in Zambia and it has operations in Kitwe, Chingola, Chililabombwe and Nampundwe.

Following protracted negotiations over the failure by KCM to pay its suppliers and contractors, ZCCM-IH moved in and ejected Vedanta Resources, an Indian owned conglomerate.

For years, KCM had been reporting losses despite holding to a mine which many Zambians think was sold for a ‘song.’

Zambia’s President Edgar Lungu announced the takeover of the mine during a meeting with mine suppliers and contractors in Ndola.

“They have lied enough to us. We will go to court and get a divorce,” said President Lungu.

Since then, Milingo Lungu was appointed as a liquidator and took over the running of KCM.

Suppliers and contractors are now receiving their money.

“The take over of KCM was well received by us and other stakeholders because KCM was unfaithful. They owned our members millions of dollars and some of them went for over five, six or nine months without payment. Now we are being paid within a month,” said Mubanga.

And in the small scale mining sector, there was a lot of activity.

A number of tailings and dumps, mostly on the Copperbelt were given to the young people.

The youths are still pushing for capital to actualize their dreams.

Still in the small scale mining sector, gold was discovered in Mwinilunga, Mumbwa and Petauke, leading to a rush by local and foreign interested business people.

In Chief Chibwika’s area in Mwinilunga, thousands of prospectors invaded the area in August.

“My chiefdom is under siege. Three thousand people have come to my villages and we are worried because the sanitary facilities in the villages cant cope, am worried for my subjects,” said Chief Chibwika in an interview.

Another gold rush is currently underway in Mumbwa where hundreds of small scale miners are prospecting. 

A video which circulated on social media a few days ago showed hundreds of residents using hand held tools digging for gold in Sichanzu area, near Luiri Mine.

And the Small Scale Miners Association has some advise on how the newly found gold can be utilised.

“We need laws that can govern the mining of gold. The mining going on is uncoordinated. The price of gold is better that copper. Going forward, we advise government to utilise this mineral which can bring the much needed wealth to this country,” said Kunda Chani, President of the Small Scale Miners President.

On a sad note, several miners died in a number of mine accidents.

Mopani Copper Mines, which is partly owned by Glencore, recorded the highest number of deaths in several mine accidents across the country.
This led to suspension of operations.

“These mine accidents and deaths at Mopani exposed their challenges in terms of safety. Mopani must invest in safety, it is not good to continue losing workers like that,” said Joseph Chewe, President of the Mine Workers Union of Zambia.

2019 is also the year when Manganese mining became very prominent in Central and Luapula Provinces.

Various foreign firms, mostly owned by Chinese investors, have set up factories in the two provinces ready to refine the mineral.

As the country enters 2020, the mining sector hopes to see an increase in copper production which saw a drop in 2019.

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