President Lungu says it’s ok for Glencore to cut 4300 jobs

President Lungu says it’s ok for Glencore to cut 4300 jobs

Zambian President Edgar Lungu is “open” to job cuts at Glencore Plc’s local unit as the company faces low copper prices and rising costs, his spokesman Amos Chanda told Bloomberg news.

Relations with the company improved following a Sept. 18 meeting between Lungu and representatives from Mopani Copper Mines, Glencore and labor unions, after the government had initially rejected plans to reduce workers, Chanda said by phone from Lusaka, the capital. Mopani plans to fire about 4,300 staff because of Glencore’s decision to suspend production at its Zambian operations for 18 months, a union said last week.

“As long as they’re done within the law, he is open to that,” Chanda said. “He wants a careful balance of keeping the workforce intact and also the need to keep the mines viable.”

Metals prices that have fallen to their lowest in six years have hit the economy of Zambia, Africa’s second-largest producer of the metal, which relies on copper for over 70 percent of exports. The southern African nation is also facing its biggest-ever power shortage as water levels decline at the hydropower dams it relies on for over 90 percent of generation.

“It’s like a perfect storm,” said Chanda. “Copper prices have come down and mining costs at Mopani have become expensive.”

Unions and Mopani will probably conclude talks Monday about the plan to suspend production at Mopani, Chanda said. Glencore also plans to halt output at some of its operations in the Democratic Republic of Congo.

“We were quite satisfied that an amicable solution will be found, not desirable but acceptable,” said Chanda.

 

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