TODAY, I have found it opportune to feature an article on the mining sector following President Edgar Lungu’s intervention in what seems more or less the make or break scenario for the country’s economy.
The mining sector is on its knees and the President was recently on the Copperbelt to convince mine owners not to wind up operations and subsequently cut jobs.
The problems in the mines have been caused by low copper prices, reduced electricity supply and a depreciated Kwacha that has pushed the cost of operations to unprecedented heights.
Mr Lungu described his series of meetings with the mines as successful but the picture is still far from clear as the situation on the ground remains relatively unchanged.
In writing this piece, my focus was to re-emphasise the need for continued dialogue between the mines, unions and Government to reach a win-win situation for the sector.
In the case of Mopani Copper Mines, which threatened to shade off 4,000 jobs, the President warned that if the firm went ahead with its plans, Government would nationalise the mine to save the employees.
All the mines have been given a flexible tax regime to operate under following the revision of mineral royalties this year.
This makes the President’s warning of nationalisation reasonable because there seems to be little effort on the part of the mines to maximise on the benefits of the new tax waiver.
The money being saved from the tax waiver should have been invested in programmes aimed at maximising profit at a time when the economic climate is not favourable.
It is agreeable that when the business environment is rough and stringent measures should be applied to cushion the negative effects.
Hence the mines should have drawn-up concise survival plans, presented them to the Government, so that an amicable solution is found to cushion the negative impact of the situation.
Zambia is a mono-economy, solely reliant on copper production and at a time like this, the preoccupation of every stakeholder must be to find a solution as to how mining operations can be sustained.
Diversification is a long-term policy that cannot be achieved over night and on the part of Government, programmes to diversify the economy should by now be taking shape as a lesson to the prevailing crisis.
In my view, the Government does not have the capacity to run any mine because this is a costly venture that cannot be combined with other competing needs such as education and healthcare delivery.
A private-sector driven economy enhances competition among suppliers of goods and services and this improves the welfare of consumer.
However, in the case of mining, the liberalisation policy has not worked well because Zambians have not benefitted from their natural mineral wealth.
This is where now the Government needs to put its foot down and refuse to be blackmailed by the foreign owners of the mines.
Issues such as skills transfer to the Zambians should be addressed so that job cuts affect the expatriates who have been brought in to operate the ‘mechanised equipment.’
Zambians need to derive more benefits from the mines apart from just jobs hence the President’s concerns that unions representing the mines have failed to address some of the issues surrounding their members.
The Mine workers’ unions and the Zambia Chamber of Mines need to strengthen their working relations to salvage the industry from collapse.
The Government let-alone the President, is just a figure-head to superintend the operations of the sector and ensure that all functions are moving smoothly.
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