Zambian President Edgar Lungu said he won’t allow Glencore Plc’s local unit to cut about 4,000 jobs and that the nation, which is Africa’s second-biggest copper producer, will find other investors to take over mining operations if the current owners have failed.
The company intends to suspend production at its Mopani Copper Mines unit for 18 months while it invests $950 million in building new shafts and upgrading plants amid copper prices near six-year lows. The plan includes firing more than 4,000 employees, and a bigger number of contract workers.
Mopani should use the profits it made during times of high copper prices to sustain its workforce now, Lungu said in comments broadcast Tuesday on state-owned ZNBC TV, speaking in the local ChiBemba language. If mining companies have failed to run their operations, government will find other investors to take over, he said. A spokesman for Baar, Switzerland-based Glencore declined to comment.
Lungu made his remarks during a five-day tour of Copperbelt province, much of which he has spent talking to mining investors and worker unions as the industry faces its biggest crisis since 2009. Falling metal prices and a power shortage have contributed to a 49 percent decline in Zambia’s kwacha against the dollar this year, the biggest drop out of the 155 currencies tracked by Bloomberg globally.
Glencore said in a corporate update and third-quarter production report Wednesday that the shutdown and restart plan at Mopani had been completed. It also increased its total estimate for copper production cuts at Mopani and mines in the Democratic Republic of Congo to 455,000 metric tons from 400,000 tons.
An optimization study at Mopani has started and the smelter will continue to operate at a reduced level or in short bursts to service contracts it has with other suppliers to process their material, Glencore said. In order to do this, the company may need to source some concentrates from the mine. Glencore said it had deferred investment in a new concentrator to 2017 and that full production won’t resume until 2018.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.