Mining job cuts haunt African leaders ahead of elections

Fri Sep 18, 2015 8:32am EDT
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* Job cuts hit Zambia, S.Africa, Congo ahead of elections

* Zambia threatens to revoke Chinese firm's mining licence

* Governments, companies in talks to prevent retrenchments

By Olivia Kumwenda-Mtambo

JOHANNESBURG, Sept 18 (Reuters) - When Canada's Barrick Gold said it would close its copper mine in Zambia if the government imposed a sharp hike in mineral royalties, President Edgar Lungu had little choice but to back down to save valuable jobs that keep the country going.

Mining accounts for over 70 percent of export earnings and employs over 60,000 in the landlocked southern African economy. With his Patriotic Front(PF) facing an election next year, Lungu, promised no jobs would be lost and agreed to lower royalties than the government wanted.

Barrick kept the jobs and the mine open in a case that highlighted the challenges for African governments in dealing with powerful international miners suffering from a global commodities slump. Governments in South Africa and the Democratic Republic of Congo (DRC) are also grappling with thousands of mining job cuts ahead of elections.

Investors in Zambia are now watching the government's reaction to plans by Glencore's Zambian unit, Mopani Copper Mines (MCM), to axe 4,300 workers, a decision by China's CNMC Luanshya Copper Mines to put 1,600 staff at its Baluba operation on forced leave, and the decision by Konkola Copper Mines (KCM), owned by Vedanta Resources Plc, to put 133 employees on forced paid leave.

"This is giving the ruling party sleepless nights," said Lee Habasonda, a political analyst at the University of Zambia.   Continued...