Zambian President Edgar Lungu will meet with mining unions as Glencore Plc’s local unit cuts more than 7,000 jobs and four other producers also intend to reduce their workforce.
Lungu called the meeting for Friday morning, James Chansa, president at the National Union of Miners and Allied Workers, said by phone. The total number of cuts at Glencore includes 4,300 direct employees while the rest are contract workers, he said. The company will notify employees from Friday. First Quantum Minerals Ltd. has also indicated it plans to fire about 5,000 contract employees, he said.
Africa’s second-biggest copper producer is reeling from the impact of prices of the metal that are near six-year lows and its worst-yet power crisis. Five mining companies have notified the government of their intention to cut jobs, Deputy Labor Minister Alfreda Mwamba told lawmakers Thursday. The kwacha has almost halved in value against the dollar this year, making it the worst performer globally out of the 155 currencies tracked by Bloomberg.
“Hopefully in today’s meeting, something fruitful will come out,” Chansa said.
Spokesmen for Lungu and Glencore’s Mopani Copper Mines unit didn’t immediately respond to calls and e-mails seeking comment. A spokesman for First Quantum declined to comment by e-mail.
The union leaders must negotiate exit packages for workers that Mopani is retrenching so they can survive, state-owned ZNBC cited Lungu as saying. It’s inevitable that mining companies will look to reduce their workforce because of low metal prices, Lungu said. Earlier this month the president said he wouldn’t allow Mopani to cut jobs, and that the company should use profits made during times of high prices to sustain workers.
Copper for delivery in three months has fallen 27 percent this year in London as growth in China, which consumes about half of the world’s output of the metal, slows and the economy shifts from being commodities driven to relying more on services.
Zambia’s mining industry provides 62,236 jobs, nearly half of which are contract workers, according to industry data. Mopani is the biggest employer, accounting for 20,000, while Konkola Copper Mines, Vedanta Resources Plc’s local unit, has 7,000 employees and 9,000 contractors.
The country produced 708,000 metric tons of copper last year, and 2015 production probably won’t be much more than 600,000 metric tons, Finance Minister Alexander Chikwanda said last month.
Mopani’s retrenchments come as Glencore plans to cut debt by $10 billion. The company plans to suspend most production from Mopani and some operations in the neighboring Democratic Republic of Congo to remove 455,000 tons of copper from the market by end-2017 while it completes upgrades that will cut costs. The company plans on spending $950 million to upgrade and modernize operations at Mopani.
Government will do its best to minimize job losses in the mining industry, Labour Minister Fackson Shamenda told lawmakers Thursday.
“Government is engaged in negotiations to save as many jobs as we can,” he said. “A good number of jobs will be saved.’’