Resource Nationalism Encore: Zambia Wants Bigger Stake in Copper Mines
ZCCM-IH, which was formerly called Zambia Consolidated Copper Mines Investment Holdings, has assets of about $1-billion with minority stakes held in the local mine operating subsidiaries of foreign miners including Glencore, First Quantum Minerals, Vedanta and Jinchuan Group International Resources.
Zambia is Africa‘s second largest copper producer behind the Democratic Republic of Congo and a 22% rise in prices this year has boosted profits for the miners.
“It’s encouraging us to invest even more in copper. That’s why we want to increase our shareholding in some of the assets we have,” CEO Pius Kasolo told Reuters on the sidelines of a mining conference in London.
He would not be drawn on how much money ZCCM-IH would invest in the companies or over what period.
“It means every single mining company in Zambia is making a profit so we have to ask ourselves how do we extract that value from this mining company,” he said.
The highest cost of production was around $5 200 a tonne for a mining company in Zambia against the benchmark price of around $6 700, Kasolo said.
“Its a matter of asking them. I can’t have shares in a company where I don’t realize value. What’s the value of me having shares if they never give me value?” said Kasolo.
QUANTUM Dispute Separately, ZCCM-IH, which is 77% state-owned, is suing Canadian company First Quantum for $1.4-billion over claims that First Quantum wrongly borrowed $2.3-billion from its local copper mining subsidiary Kansanshi Mining.
The long-running claim by ZCCM-IH includes $228-million in interest on the loan as well as 20% of the principal amount, or $570-million and talks over a possible settlement began earlier this year.
ZCCM-IH alleged in court papers filed last year that First Quantum used the money as cheap financing for other operations while First Quantum has said the loans were granted at a fair market rate.
Kasolo said an out-of-court settlement might yet be reached but the court case would continue to run in parallel with discussions.
“We want a win-win situation. We don’t want to kill the mine,” he said.
Beyond the spat between ZCCM-IH and foreign mining multinationals, critics point to the fact that poverty in Zambia has never been this worse; currently at a mind-boggling 86 percent. Zambians find it difficult to reconcile the contradiction that they live in “the richest yet poorest country in the world.” Radical critics even go as far as to suggest that their country’s poverty “is now an unwritten state policy under the pro-capitalist and pro-business PF [Patriotic Front] government; where mining concessions and investment/trade decisions are all made and given to the benefit of the multinational mining corporations without any thought to what the Zambian people will benefit, if anything.”
Even the state believes that Zambia has been losing over US$10 billion from tax evasion, unchecked profit externalization, just as environmentalists and mining communities have been mobilizing against the unseen slow effects of pollution and environmental degradation which the quasi-official environmental watchdog ZEMA always waives off as “normal pollution levels.” That’s cold comfort for people in mining areas who continue to suffer from all sorts of pollution-related illness and have no access to proper healthcare that is available to the privileged now.
The backdrop to renewed quest for “resource nationalism” is the realization that the digging and “looting of our mines”, the raping of our land (according to critics) goes on and on; billions which could go to provision of free education, healthcare, infrastructure housing development and much more, may have been siphoned out of Zambia by mining companies, as a small local political elite and bureaucratic elites benefit. The gaping holes, empty craters, polluted rivers, and mass poverty that liter Zambia should push mining companies to sincerely make “social license” from the mining communities, not just the state, a critical calculus of its bottom line. Failure to make this calculation got miners in trouble in Tanzania, following the ascension to power by President John Magufuli in 2016.
Credits: Reuters
