Message Jeu 10 Sep 2015 17:23

Zambia to address jobs threat at Glencore's Mopani Copper

* Glencore plans to suspend some mining operations

* Mining minister says will hold talks to save jobs

* Rules out further changes to mining royalties

* Zambia is Africa's second-biggest copper producer (Adds union official, mine tax)

By Chris Mfula

LUSAKA, Sept 10 (Reuters) - Zambia is to hold talks with Mopani Copper Mines (MCM) over parent company Glencore's plan to suspend operations after a drop in the metal's price, the mining minister said on Thursday.

An electricity shortage and weaker copper prices have put pressure on Zambia's mining industry, threatening output, jobs and economic growth in Africa's second-biggest producer of the metal.

The power problems and slide in copper prices have driven the kwacha currency to record lows amid a sell-off in commodity-linked currencies as key consumer China's economy has slowed, renewing pressure on Zambia to diversify its economy.

Glencore, Vedanta Resources and China's NFC Africa and CNMC Luanshya Copper Mine have all said they will shut down some operations because of the harsh business environment.

Zambia minining minister Christopher Yaluma said that the government would not respond to Glencore directly but would instead negotiate with Mopani because it is more familiar with the local economy.

"We are about to start discussions with Mopani. We get very concerned when pronouncements are made about retrenchments," he told reporters. "Glencore is a parent company, so when they talk, they are talking at that level. That is a little bit distant."

Officials at Mopani were not available to comment.


The president of Zambia's largest mining union said the move by the government could help to save thousands of jobs.

"We have also been talking to Mopani and are happy that the government is doing so. This will save jobs," Nkole Chishimba told Reuters.

However, independent analyst Maambo Hamaundu said that talks should have started earlier, adding: "The economy of the copper belt could collapse without Mopani."

Mining minister Yaluma also said that Zambia would not make further changes to mining taxes despite the drop in copper prices.

"We'll maintain the taxes as they are right now. We want to maintain some consistency," he said.

"If there is consistency, investors will be able to predict the performance of their operations over the next three, four, five years."

Zambia's government set the royalty tax rate for open-cast and underground mining at 9 percent in April, rowing back from earlier plans to charge as much as 20 percent.

However, the state said on June 5 that it would cut mineral royalties for underground mines to 6 percent because underground mining was more expensive than open-cast mining. (Editing by James Macharia and David Goodman)