DJ Zambia Government Defends Vale's Konkola North Mine Inve

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DJ Zambia Government Defends Vale's Konkola North Mine Investment
Posted on: Wed, 04 Aug 2010 04:52:04 EDT
DOW JONES NEWSWIRES

The Zambian government is fully supportive of the proposed development of Konkola North Copper Mine by Brazilian major Vale SA ( VALE | PowerRating) and the company's labor relations record is "acceptable," the minister of mines and minerals development said Wednesday.

Maxwell Mwale told Dow Jones Newswires the Zambian government values foreign investors in its mining sector who have been instrumental in the development of the country and job creation.

"As a host nation, we expect Vale to abide by the country's labor laws so there is no cause for alarm," he said by telephone by Lusaka, the Zambian capital.

Mwale was responding to comments by the Miners Union of Zambia, which urged the government to be cautious of Vale's planned $400 million investment in the 50,000-metric-ton-a-year mine. The union's Rayford Mbulu told Dow Jones Newswires July 20 that the company had a poor "human rights" record because a recently-resolved strike took place at its Sudbury operations in Canada for over a year.

"If we lack ideas to extract our copper, it is better for it to remain in the ground so that our children can come and extract it. If Vale cannot respect the rights of workers in Canada, a first world country, what about Zambia?" Mbulu said.

But Mwale said it shouldn't be expected that similar labor issues would arise in Zambia.

"Vale is the second largest mining company in the world, the fact that it has just had problems at its Canadian unit doesn't mean that it should be prevented from investing in Zambia," he said.

Mwale further said Vale will develop Konkola under a joint venture with African Rainbow Resources, a South African black empowerment company.

Zambia is Africa's largest copper producer.

-By Nicholas Bariyo, contributing to Dow Jones Newswires