Feature - Future of mines uncertain

Zambia's copper mines have been a source of employment for thousands, but low copper prices have meant these jobs are now at risk. Fanwell Lubunda, 38, has been working for the Nchanga open pit copper mine in the mining town of Chingola, in central Zambia, for the past 17 years. He joined the mine as a trainee operator of heavy machinery and rose through the ranks to become an instructor in the fifth biggest open pit copper mine in the world. But now his future, and those of 800 of his colleagues at the mine is in doubt. The mine was privatised in 2000 and sold to Konkola Copper Mines (KCM). This week, company spokesman and chief financial officer Norman Mbazima said the mine had out-lived its usefulness after more than four decades and would close in just under 18 months. "Our plan is to remain operational from 2003 to 2004 and after that, I am afraid, we will have to shut down and the majority of the miners will be retrenched. This thing (Nchanga mine) has come to an end and there's nothing we can do about it," Mbazima said. The closure of the mine has left workers like Lubunda with an uncertain future in a country with few formal sector employment prospects. Chingola, with a population of about 178,000 has an economy that is predominantly mine oriented. It lies about 550 km north of the capital, Lusaka, in the Copperbelt province. Copper is responsible for about 80 percent of Zambia's foreign currency receipts. Throughout the 1970s the country's economy boomed on the back of strong international prices, only to contract in the 1980s as copper lost its shine. The current price is at its lowest level in 14 years. Nchanga is one of three mines that the Zambian government sold to the world's number two mining company Anglo American in March 2000. The sale followed years of donor pressure and drawn-out negotiations while the state-owned Zambia Consolidated Copper Mines stagnated, starved of much-needed fresh investment. The other two mines - Nampundwe in Lusaka and the Konkola underground copper mine in Chililabombwe, near the border of the Democratic Republic of Congo (DRC) - also face an uncertain future as Zambia looks for a new strategic mining partner following Anglo's withdrawal. Anglo cited low copper prices and high costs of production for its decision earlier this year. KCM digs copper at more than 70 cents per pound while other copper-producing countries, like Chile, are mining at less than 50 cents. These countries can also afford newer technology and are coastal, while Zambia's production and transportation costs are worsened by the fact that the country is land-locked and therefore has to transport the finished copper cathodes on trucks and railway lines, at added cost. In all, KCM employs about 11,500 people. The news of the imminent closure of Nchanga has sent shock-waves through Chingola, as residents are all too aware of the misery brought on by the closure of a copper mine in the neighbouring town of Luanshya. That mine was shut by Indian mining company Binani. Another casualty, say critics, of the rapid privatisation programme Zambia embarked upon at the urging of the International Monetary Fund (IMF) and World Bank. "I will feel very bad if the mine closes," Lubunda told IRIN. "We all know what has happened to our friends in Luanshya, they are suffering and are desperately trying to turn to farming, which they have no idea about. I have been a miner for 17 years or literally all my [adult] life and I can't do anything else. I can only hope a solution can be found to keep the mine open," he said. But the miracle Lubunda prays for seems unlikely. "The cost of mining copper here is ever so high and the price of copper is low," Mbazima said. "As the mine's life comes to an end, you have to make a business decision and the decision is to close." Lubunda and his colleagues are also worried about whether they will receive retrenchment packages. "Our friends in Luanshya have not been paid since the mine was shut down more than a year ago. What assurance do we have of getting paid if this mine shuts down like they are saying? I have five children and a wife who depend on me, how will I take care of them?" Lubunda asked. District administrator Jean Phiri is not entirely pessimistic about the future of Chingola, though she admits that families would be hard hit by the mine closure. "There's still hope for the miners who can diversify into farming because Chingola has the potential for several farming projects. For instance, we initially had two fish farms in early 2001 but now we have 178 fishponds. That and maize growing could be an alternative to mining, if favourable financing is made available. Farming is the best alternative," Phiri said. But some are sceptical about converting the miners into fisherman and maize farmers overnight. "It's like teaching an old dog new tricks," said Lubunda. The company is unable to say whether they have any plans to re-deploy the miners they will retrench and those affected by the closure have learnt of it through the media. Zambia has come under fire for privatising without putting in place social safety nets, to cushion the blow to the thousands that have lost jobs through its economic recovery programme. The Zambia Privatisation Agency (ZPA), which has transferred more than 280 state owned enterprises into private hands, foreign and local, said the recovery programme has seen more than 77,000 people lose their jobs. However, the ZPA argues that some of the jobs were not directly lost through the privatisation programme but through the government's ambitious plan to streamline the public service under the Public Sector Reform Programme (PSRP). The PSRP seeks to cut jobs in the bloated public service. These job losses are expected to cost President Levy Mwanawasa political points - should he survive a petition seeking to nullify his December election in the Supreme Court which opposition, local and foreign election monitors charge was fraudulent.