FORMER mines minister Dr Kalombo Mwansa says the 2,000 jobs at KCM can still be saved without the government taking over the mine.
And mines deputy minister Richard Musukwa has told finance permanent secretary Felix Nkulukusa not to argue with ministers but devote his energies explaining policy implications of the Statutory Instruments number 32, 33 and 78 and charges implemented under the national budget as regards capital allowances and increase in mineral royalty tax by six per cent which the mining company cited as the reasons for its plans to retrench workers.
In an interview yesterday, Dr Mwansa, a former minister in the Levy Mwanwasa government, said KCM could still make profit at US$7,273 per tonne.
"From my understanding of the mining industry, they can make a profit even at US$5,000 per tonne," he said. "The question of profit cannot be the main reason because at the time we did these calculations when we were revising the mines and minerals Act in 2008, at about US$5,000 per tonne mining firms were able to make some profit, so where it is now they are still able to make some profit even if costs go up."
He said what was important was for the government and KCM to dialogue to find a solution to save the 2,000 jobs in Chingola.
"The government and KCM must sit and look at the issue holistically. This is a matter which they can solve through dialogue. We have had similar problems in the past and have sat down with the mining companies and found the solution," Dr Mwansa said
He said the government lacked capacity to run mining companies, contrary to current mines minister Yamfwa Mukanga's statement that the state had the capacity to take over operations at KCM following its intention to cut 2,000 jobs.
He said the government could not take over the operations of KCM because that time was long gone.
"We can't go back to nationalisation. We have long past the idea of the government doing business," he said.
Mukanga last week rattled investors when he said they should not think that the government had no capacity to run the mines if they decided to leave.
But Nkulukusa argued that the treasury had no money to take over KCM's operations because it was not budgeted for in the 2013 national budget.
KCM said it would reduce the total number of employees at its operations in Chingola by 2,000 from 8,263, citing rising operational costs and dipping copper price on the international market.
The mining giant said labour and electricity, its two key costs, had been "increasing constantly and substantially."
Meanwhile, Musukwa disagreed with Nkulukusa over the latter's recent statement that the treasury had no money to take over KCM.
Musukwa said the government had what it took to run the mine on temporary basis to protect people's jobs if any investor decided to cut jobs.
In an interview yesterday, Musukwa said Nkulukusa was a technocrat and should devote his energies explaining to KCM the government policy in terms of the implications of the Statutory Instruments number 32, 33 and 78 and the charges implemented under the national budget as regards capital allowances and increase in mineral royalty tax by six per cent which the mining company cited as the reasons for its plans to retrench workers.
"Nkulukusa must spend energies to explain to KCM about the SI units, the benefits for the country and the benefits for the industry. He should explain to KCM about the mineral royalty. I doubt if he has raised issues which KCM wrote in the letter. KCM is complaining about the price of the metal; he (Nkulukusa) should explain to KCM and the people of Zambia if the company is justified to prune the 2,000 people when the price of copper per tonne is at 7,000," Musukwa said. "At what rate did we privatise the mines, was it at US$7,000? What necessitated privatisation of the mines, were it resources and the capacity to run the mines? Those mine houses promised that they had financial muscle to inject in the operations," Musukwa said.
He said under the PF government, the system of pruning people based on the reasons KCM had put across would never be allowed.
Musukwa said the government would not accept declaring over 2,000 people redundant because it was a cosmetic solution.
"I advise Mr Nkulukusa not to argue with the ministers. His role and that of ministers are very different. Let him provide a technical solution on the table because the reasons KCM was giving were against the policy directives from the Ministry of Finance," Musukwa said.
And PF member of the central committee in-charge of labour Davies Mwila said the party promised jobs through the mines and there would be no excuses of retrenchment that would be accepted.
"People are not employed to be dismissed and we are not saying we will nationalise the mines but the fact is that if KCM decided to leave, the state can take over on a temporary basis and find in the near future a suitable investor and we are capable of doing that," said Mwila.
- 'SATA'S HEALTH TALK IS A WASTE OF TIME'
- Kazimu, Kawandami's son in road accident
- Sata visits son Kazimu in South Africa
- Hakainde's conduct pains munkombwe
- mps want pay rise
- Malaysian plane carrying 295 people crashes in Ukraine near Russian border
- Interviewers seek sex from female applicants
- Koffi out to repair image
- Crackdown fails to stop Chibolya marijuana trade
- Sata visits Kazimu in SA