Zambia Handling Carefully Situation Of Fall In Copper Prices - Dec 15, 2008

The challenges in the mining sector in Zambia arising from plummeting copper prices and the world economic crisis need to be handled with caution and level-headedness. Copper mining is still the mainstay of the country's economy and any emotional outbursts and approach are bound to create distortions in the financial and key sectors of the economy.

The announcement on Saturday that Luanshya Copper Mines (LCM) will cease operations and be placed under care and maintenance has obviously evoked various feelings, some of them unpleasant particularly among primary stakeholders such as workers. However, the Mineworkers Union of Zambia (MUZ) has exhibited caution and maturity regarding the developments at LCM, which has a total workforce of 1,741.

MUZ general secretary Oswell Munyenyembe has indicated that his organisation has welcomed President Banda's decision to involve all stakeholders as the Government and LCM management handle all issues surrounding the problem at the mine. We appeal to workers and other stakeholders to remain calm and analyze all issues that have led management to decide to place the mine under care and maintenance while weighing other options to revitalise operations.

It is important to look at two issues critically. One is that the price of copper on the international market has dropped drastically and the obvious effect is that profitability is negatively affected. Secondly, it should be borne in mind that the world economic meltdown, which has effected even the most powerful capitalist states in the West, has not only negatively affected the profit levels, but has also pushed production and other costs upwards.

This scenario does not only affect this country, but other countries some of which are in worse situations than Zambia. It is with the above in mind that the labour representatives, the miners, contractors and suppliers to the mining firms being primary stakeholders, should remain steadfast and be wary of any elements that would want to mislead them.

Some elements may want to take advantage of the situation in Luanshya and other mining towns to promote their own agenda and embarrass the Government. They would want to spread messages to suggest that the Government and investors have failed the people in Zambia when it is in fact the dictates of the world economy at play.

Thus, we appeal to the Zambians to analyze all issues in their entirety so that the country's economy does not slump further arising from actions such as demonstrations, which could create tension and scare aware investors. Investors worldwide would want to put their investment in a safe and peaceful environment, which Zambia is.