KONKOLA Copper Mines will this week place its Nchanga Underground Mine on care and maintenance.
According to a shutdown a management notice being circulated to stakeholders, including the mine unions, 2,503 contract employees will be laid off immediately.
This comes barely a week after President Edgar Lungu visited the mine and claimed that he had intervened in the ongoing retrenchments of miners, which has already resulted in thousands losing jobs.
The shutdown notice dated November 4, explained that the company proposed to close Nchanga Underground Mine in order to stop unsustainable losses.
“KCM is facing a serious challenge with the profitability of its business. The company is proposing to close the Nchanga Underground Mine in order to stop unsustainable losses from the mine. This would result in 1,678 contractors currently working at NUG (Nchanga Underground) being released immediately and a further 825 contractors being released elsewhere in the business over the next three months. No employees of KCM would be made redundant,” read the notice in part.
“As part of the company’s consultation with the trade unions covering its employees, this paper seeks to explain the rationale for the course of action being proposed. The NUG ore body has become increasingly costly to mine due to the following reasons; production areas are now lower in the mine requiring additional ventilation and pumping. Ground support requirements to resist the rock pressures have increased and are more expensive. The ore body is further away from the two main shafts with an increased access distance and access time. For example, haulage of ore from the production blocks below 2,720 level requires both diesel trucking and rail haulage to bring it to the haulage shafts.”
The company further states that supplementary power required to run KCM has increased from 7.4 US cents to 15.2 US cents, with the higher price power billed first, and that although the tonnes of ore hoisted from the mine has decreased by 30 per cent from the 1990s to 2014, the number of people employed underground had remained almost constant at around 3,000.
The Vedanta Resources-owned company said the ore grade had reduced.
“With the thinner ore body, draw control has become more difficult with waste being extracted earlier in the production cycle. This reduces ore grade. The current predicted ore grade of 1.47 per cent is significantly lower than grades previously extracted. The predicted grade is further reduced by the earlier waste extraction. More tonnes have to be mined to produce the same amount of copper,” KCM explained.
The company went further to justify its action with an illustration of a table comparing the ore grades and productivity changes since the mine opened in the 1950s.
The company further stated that the present cost structure at Nchanga Underground requires a copper price of US$ 6,300 per tonne to make profit, a price much higher than the current US$ 5,150 per tonne.
“To stem these unsustainable losses, KCM proposes to place NUG into a managed care and maintenance. The care and maintenance programme will protect the Nchanga Underground by maintaining all current pumping stations, maintaining ventilation and shaft access, although at a reduced rate and employing a care and maintenance crew to ensure the underground equipment is maintained and serviced,” KCM further stated.
“[KCM proposes to] commence a comprehensive technical evaluation to examine the mining methods required to mine the remaining ore economically. This study will also determine the copper price required to restart the mine. Protect KCM capability and capacity by moving KCM NUG employees into surface employment in the Nchanga Concentrator and Tailings Leach plant. This redeployment will replace existing contract employees. A further number of employees with specific skills will be required to move to Konkola to replace underground contract employees.”
However, mine union sources have described the move by KCM as a slap in President Lungu’s face who said his Copperbelt trip was 80 per cent successful.
“He has failed to do anything because a serious Head of State would have known that KCM wants to remain with the smelter so that they buy ore and process it the following day and sell. He should have known all that, the unions gave him this data but he opted to insult them ‘pa’ rally for protecting miners; he called them ‘ukutumpa’. So they are showing him that actually, the eight out of 10 marks he gave himself is a false marking, it’s zero out of 10 because miners have continued to go on the streets in large numbers,” said the source.
KCM public relations manager Shapi Shacinda’s phone went unanswered when several efforts were made to contact him while MUZ secretary general Joseph Chewe expressed ignorance about the notice and promised to follow up the matter when his office was made aware.