LUSAKA (Reuters) - Glencore’s (GLEN.L) Zambian unit Mopani Copper Mines (MCM) has notified the government that it plans to lay off more than 3,800 workers due to lower metal prices and high production costs, government sources said.
An electricity shortage in the southern African nation and weaker copper prices have put pressure on its mining industry, threatening output, jobs and economic growth in Africa’s second-biggest producer of the metal.
Mopani had initially said it planned to cut 4,300 citing lower metal prices and high production costs.
“Mopani has served the labor commissioner with a notice stating that they plan to declare 3,817 workers redundant,” a source at the labor ministry told Reuters late on Tuesday.
“They now have to wait for the labor commissioner’s opinion. The labor commissioner has to consent before they can implement the plan,” the source said.
Mining firms are required by law to notify the government when planning to reduce jobs, another source at the ministry of mines said.
“They are still engaging the unions and other stakeholders like the government, so that number can’t be final,” the second source said.
Glencore had raised the amount of money it planned to invest in Mopani to almost $1 billion dollars from $500 million over the next 18 months to improve efficiency, the source said.
Mopani’s spokesman Cephas Sinyangwe declined to comment on the planned job cuts and the proposed investment.
President Edgar Lungu’s spokesman Amos Chanda said that government officials had met executives at Glencore and Mopani to urge them to follow the law while implementing the job cuts.
“We don’t want a lot of jobs to be lost but we welcome Glencore’s plans to invest huge amounts of money in Mopani to enable it withstand shocks like the current one,” Chanda said.
Editing by James Macharia