Lusaka, Zambia — 01 July 2013 – It may be too early to celebrate Konkola Copper Mines (KCM)’s recent u-turn over the pruning of 2,000 employees as the company now says this is still one of the options it is exploring to reduce operational costs.
KCM strategy and business development director Brad Gnanasivam said in a media interview here that some workers might lose their jobs if copper prices continued dropping, reports allAfrica.com.
Recently, KCM threatened to lay off 2,000 workers, but rescinded its decision after the Zambian government intervened.
Gnanasivam said despite government intervention, KCM was still exploring other mitigation measures to enable it cut down on operational costs. The company did not find pleasure in laying off workers and this would only be a last resort.
He explained that KCM was in a difficult position in terms of its cost base, as copper prices had been going down from US$8,500 two years ago to US$7,700 last year, and this year the price had dropped to US$6,700. “If copper prices keep going down then we will have no option and it will not only be us to lay off the workers,” he said.
Gnanasivam pointed out that despite the challenges the mining firm was facing, it was the largest employer in Zambia after the government with 20,000 workers, and the highest paying mine in the country in terms of unionised employees.
He said the company had increased salaries by 250% from 2004 to 2012, adding that KCM’s mining operations were the most power-consuming in the country and, therefore, the increase in electricity tariffs greatly affected its operations.
Source: allAfrica.com. For more information, click here.