OVER 200 workers have been retrenched at Chambishi Metals after the company was placed under care and maintenance by owners Euro-Asia Resources.
ERG says the reason the mine has been closed is due to lack of feedstock to continue sustaining its operations.
But the Mineworkers Union of Zambia has demanded that ERG hands back its licence so that the government can find a serious investor.
MUZ president Joseph Chewe argues that the investor has not been pumping money into the firm to boost operations.
Chewe disclosed yesterday at a media briefing that only 28 workers would remain maintaining the mine, while 229 others have since been retrenched and would leave the mine at the end of this month.
Managers are expected to leave immediately.
Chambishi Metals is the country’s producer of cobalt and gypsum, a key ingredient in the manufacturing of cement and its closure threatens the construction industry as importation of gypsum will push cement prices up.
Chewe however said the union successfully negotiated a severance package for the retrenched workers taking into consideration the loans some of them obtained while in employment.
“Chambishi Metals is the only company that is producing cobalt and it’s a flagship for Zambia. So when Chambishi Metals is having a challenge we must be aware that the name that we have in terms of that metal will now be thrown away. So Chambishi Metals also produces gypsum which is used in cement manufacturing which is a very important ingredient so if Chambishi Metals has a problem, the cement price will go up because the manufacturers of cement have to import it from South Africa and elsewhere,” he said.
“MUZ and Chambishi Metals have been meeting with a view to compel the owners of Chambishi Metals not to close the operations. Unfortunately, we had prolonged meetings with management of Chambishi Metals where they informed the union that the company will be placed on care and maintenance beginning month end of January owing to the fact that the company has failed to find feedstock to run the metallurgical plant.”
He described the development as “very unfortunate” because the community of Chambishi will be crippled economically.
“The workers who will be retrenched, the number is 229 then 28 will be retained as care and maintenance employees. This is an unfortunate situation to us who are representing workers,” Chewe said. “It’s a regrettable situation for the community of Chambishi and equally the business community who depend on Chambishi. So it’s a loss to the country for the company to be put on care and maintenance.”
He said the union had ensured that all affected workers are paid their dues, broken down as four months’ period for each year served as severance.
“We also put it to the company that most employees have gotten loans and they may not get what is due to them because the money might go to service loans. So as a union we have also taken initiative to negotiate a package of K45,000 across all workers that will be affected and a K6,000 in terms of repatriation,” he said. “So this is the package that workers will get. We know that this company will have serious impact on the community of Chambishi and the country because it produces cobalt which is a flagship for this country including gypsum and acid. This is a metallurgical plant, they don’t have a mine.”
Chewe said MUZ had been encouraging Chambishi Metals to find a mine where they can find reliable resources.
“Of course the other reason is that the company has gone into care and maintenance is that there has been no money put in the operations to buy concentrates either from Lumwana and elsewhere just like KCM, Chambishi Copper Smelter, they are buying concentrates from other mines other than resorting to the closure,” Chewe added.
“ERG group has failed to run the plant. You recall that this plant has been closed several times so we can only call upon the Ministry of Mines that ERG nabafilwa (they have failed). They should return the licence, they give to us, because these jobs we keep losing, it’s inflicting poverty in the Chambishi community. ERG have failed, this on and off operations is detrimental.”
He also disclosed that management indicated that the plant might not be reopened in the next two years.
Chewe said that was the reason MUZ was advocating the revocation of the licence because a viable plant cannot be kept closed for that long.
Meanwhile, Chewe said negotiations for salary increments across the mining industry have been concluded. He said the Copperbelt Energy Corporation (CEC) had agreed a 10 per cent increment for unionised workers, KAGEM mines also 10 per cent, Kansanshi Mine (eight per cent), FQM seven per cent, Lubambe Mine eight per cent, KCM has offered a K1,000 increment across the board and Germcanton which has offered K350 increment.
But Chewe said the sharp increase in the cost of living still outweighed the recent increments but remained optimistic that negotiations were a continuous process.