Lusaka – The Zambian government’s recent acquisition of 90 percent of the shares held by Glencore in Mopani Copper Mines forms part of the country’s Economic Reform Programme, Mines Minister Musukwa has said.
As part of the US$1,5 billion transaction, commodities giant Glencore Plc will collect 80 percent of copper sales from Mopani for between 10 and 17 years to offset a debt that the copper miner owes the Swiss firm.
Last year, Glencore put Mopani Copper Mines on care and maintenance for three months, and offered to lay off workers. It said it could not afford to run the business when the COVID-19 pandemic was negatively impacting on productivity and revenues.
The government – through Zambia Consolidated Copper Mines Investment Holdings (ZCCM IH)stepped in to ensure the mine keeps operating, Minister Musukwa said.
Mopani last year produced 119,000 tonnes of finished copper.
ZCCM IH chief executive Mr Mabvuto Chipata also dismissed claims that the Mopani acquisition was part of a government plan to nationalise mining.
“We have studied the assets and liabilities and this thing will be run by experts and we are not taking chances to ensure that we run it efficiently,” he said.
Workers unions have backed the government’s intervention, saying it would help stabilise operations and improve job security.
Both the National Union of Miners and Allied Workers and the Mine Workers Union of Zambia said the government’s shareholding would assist in capital raising and guarantee continued operation of the mine.
They also accused Glencore of seeking to frustrate the government’s economic objectives by placing the mine on care and maintenance, noting that the miner had done the same in other countries it operated.