ECONOMY SHAPING UP 

Sun, 26 Mar 2017 10:41:34 +0000

INDICATIONS by Vedanta Resources Plc Chairman Anil Agarwal to make an additional investment of US$ 1 billion into the operations of the giant mining company Konkola Copper Mines (KCM) gives hope that the mainstay of Zambia’s economy is set to rebound.

This announcement comes barely a month after another mining company Mopani Copper Mines (MCM) embarked on a recruitment process of some workers it had retrenched sometime in 2015.

Going by the stability in the Copper prices on the London Metal Exchange, it is anticipated that many mining companies which faced operational challenges two years will resuscitate their operations.

The political and business environment looks good and there is guaranteed hope that there is light at the end of the tunnel.

As we have repeatedly said before, the challenges that engulfed the mining sector two years ago were beyond Government’s control, they were mainly triggered by external factors.

And it was unfortunate that some disgruntled politicians particularly from the opposition United Party for National Development (UPND), turned the challenges experienced for political expediency.

Be that as it may, the tumultuous period the mining industry has been through was not unique to Zambia. This was the common trend in many nations whose economies largely depended on mining and petroleum.

For instance, South Africa’s mining giant Anglo American Platinum faced similar challenges in sustaining its operations amidst lower commodity prices on the international market as well as massive power load shedding.

Under such conditions mining companies are left with no option but to downsize on the workforce so that they remain afloat. Otherwise, the risk of going under is higher when production is sustained despite the losses.

This directly puts the economy on the edge considering that a shutdown implies reduced revenue base from the main contributor to the treasury.

However the situation, it is but a passing phase which comes and goes. Ordinarily, no season is permanent in life.

And this is why the additional injection of US$1 billion Vedanta Resources Plc into KCM is good news owing to the basic fact that expansion of production at the mining giant will posit many benefits to the economy of Zambia.

It is estimated that from now onwards, KCM will create about 7000 jobs which ultimately entails more payment of taxes to Government through the employees’ monthly deductions and other royalties.

It is particularly interesting to note that KCM management has committed to align its operations in Zambia to the Government’s economic diversification agenda by pledging to venture into other sectors such as agriculture, environment and technology.

We hope that KCM will prioritise environmental protection in its mining operations knowing so well that the company has in the past been dragged to court on allegations of environmental pollution.

What interventions has KCM put in place to ensure environmental protection?

The company has to come out clearly on the measures it has put in place so that the environment is protected from pollution and the people near the mining operations do not suffer health consequences.

Therefore, we urge the Zambia Environmental Agency (ZEMA) to take emphasis by Vedanta Chairman Anil Agarwal that protection of the environment was a core component of KCM as a basis on which to hold the company to account.