Lusaka, Zambia — MININGREVIEW.COM — 11 March 2009 – The government of Zambia has asked Swiss-based Glencore International AG to surrender the Mufulira and Nkana copper mines, which it plans to shut down temporarily in the southern African country.
Mines and minerals minister Maxwell Mwale said in a statement seen here by Reuters that the government would not accept the closure of the two mines, which owners say have been making losses since copper prices started to decline on the world market.
Last week Glencore notified the Zambian authorities that it planned to cease operations of the two mines until copper prices reached the average level of US$5 500 per tonne. Copper for three months delivery on the London Metal Exchange stood at US$3 710 a tonne yesterday – way off last July’s record high of US$8 940 reached before global recession fears ravaged demand for metals.
“The government wants Glencore to hand over the Nkana and Mufulira mines instead of suspending operations,” Mwale said.
“The government is urging Glencore to reconsider its proposed course of action in that we have had a precedence set by Anglo American, which upon realising it was making losses surrendered its assets to the government,” Mwale added.
In 2002, Anglo American surrendered Konkola Copper Mines (KCM) – the country’s largest copper producer – to the government, after making losses due to low copper prices.
“In this regard, the government would like to urge Glencore to surrender the assets of both Mufulira and Nkana to ensure continued mining operations and avert disruption to the social economic life of our people in the country,” Mwale continued.
The global crunch has led to a decline in demand for metals, and forced several mining firms to scale down operations or to shut down their mines in Zambia, where copper mining is the country’s economic lifeblood. Copper mines are a major employer in the country of 12 million people.
In December, Luanshya Copper Mines (LCM) ceased operations at the Baluba copper mine and also at Chambishi Metals Plc – the country’s largest copper producer – and cut back 1 700 workers, citing operational problems arising from the global crisis.
Last week, Albidon Limited of Australia placed its Munali nickel project in Zambia under care and maintenance, blaming the crisis. Workers’ unions urged the government to take over the troubled mines.
Several other mines have cut jobs in Zambia.