Tuesday, November 25th, 2008


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LUSAKA, Nov 25 (Reuters) – Canada’s First Quantum Minerals, which suspended copper output at its Bwana Mkubwa processing plant last month after running out of copper ore, has laid off 286 workers at the facility, union officials said on Tuesday.
Mundia Sikufele, the president of the National Union of Mining and Allied Workers (Numaw) also told Reuters a further 50 workers would be laid off at Kansanshi Mining Ltd., First Quantum’s copper mine in the country, due to the global financial crisis that has weakened metals prices.
The state-run ZNBC radio quoted other union officials as saying 26 workers at Chambishi Metals Plc, the country’s largest cobalt producer, had been sent on forced leave due to operational difficulties caused by weak metals prices.
“According to our numbers, 286 workers have been retrenched at Bwana Mkubwa since there has been no production, Kansanshi wants to send home 50 workers and the story is generally the same at all mines,” Sikufele said.
The mine ran out of copper ore this year, and has been relying on copper ore mined in the Democratic Republic of Congo. The DRC banned the export of copper ore to Zambia in 2007. Bwana Mkubwa shut down after copper ore stockpiles ran out. Officials of the copper mines were not immediately available for comment.
Mines and Minerals Development Minister Maxwell Mwale said the copper mines were citing unsatisfactory reasons for the job cuts and that it would be a violation of Zambian laws to sack employees without consulting the government.
“They (Bwana Mkubwa) should not be painting a gloomy picture when they depended on ore from the Congo to operate and no one can blame the (Congolese) for wanting to benefit more from their copper,” Mwale said.
Mwale said he would institute investigations on why the other mining firms wanted to lay off workers, saying copper prices were still good enough to sustain mine operations.
Sikufele also said the mining firms, which have differed with the government over new mining taxes introduced in April, were not sincere by blaming the current global financial crisis as one of reasons for cutting jobs.
“We are having discussions with them over these complaints (and job cuts), but they should not use the financial crisis as an excuse to cut jobs,” he said. “They made huge profits when the prices were high and they never shared the cake with workers,” Sikufele said.
(For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ ) (Reporting by Shapi Shacinda; editing by James Jukwey)

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Economic experts have said the on going economic slow down in Zambia, which has seen the local currency depreciating against major convertible currencies, is a phenomenon induced by global market forces and will need economic strategising to mitigate.

Zambia Association of Manufacturers (ZAM) chairman, Dev Babbar and economic consultant Oliver Saasa in separate interviews pointed to the global economic developments as the main influences on the local economy currently.

Mr Babbar said the Kwacha’s decline was a function of global economic issues whose effects on an economy like Zambia’s, which is still in its development stages, cannot be avoided.

Zambia had adopted an open market economy, which is susceptible to any development in the global economy.

Professor Saasa reiterated that the depreciation of the Kwacha against major convertible currencies was as a result of low copper and other metal prices on the world metals market.

Prof Saasa said much of the Kwacha’s depreciation was as a result of the global financial crisis, which had deprived financiers money to invest in other economies.

He said what could be done for the Zambian economy was to maintain high production levels.

Prof Saasa urged the manufacturing sector to stabilise production costs because this was the only way that the sector could manage to keep afloat in the current difficult times.

He said there was need for all stakeholders to present a calm investment picture of Zambia through both speech and actions.

Prof Saasa projected that the economy may not manage to attain the targeted seven per cent growth rate under the current circumstances.

A slump in the pric e of copper arising from dampened demand saw foreign exchange inflows from the export of the metal dwindle in the last six months or so.

The mining sector had experienced a boom in the last seven years, largely because of soaring metal prices riding on a huge demand for metals by economies like China and India.

Since April how ever, metal prices have been in free fall on the LME, with the price of copper falling from the record high of US$8,900 then to below $3,500 as at the end of last week.

The slow down in the economy has seen prices of commodities including the staple maize meal rise in the last two months.

Economics Association of Zambia(EAZ) president, Mwilola Imakando said the current fall in the value of the Kwacha was based purely on economic factors and had nothing to do with local politics or any other non economic factors.

“The local economy is responding to market forces following developments in the global economy, any other view on this is mistaken.” Dr Imakando said.

The EAZ president said that at the moment, Zambia was experiencing a low inflow of foreign currency owing to reduced copper earnings because of the metal price slump.

Consequently, this had exerted much pressure on the local currency as per the supply and demand rule.

He said it was likely that demand for metals would still be dampened in the near future meaning that the foreign exchange inflow would yet still be affected.

“Zambia has no control over the pricing of metals on the international market, the strategy should be to diversify the economy and promote high value crops including cotton and tobacco to enhance export earnings,” Dr Imakando said.

In this way, the fall in foreign exchange inflows would be compensated to a certain extent.


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Despite successful efforts to reduce its HIV/AIDS prevalence, Zambia, which “has weathered one of the world’s most devastating assaults by” HIV, continues to face obstacles to effectively fight the disease, London’s Guardian reports.

The country’s HIV/AIDS prevalence rate has decreased from about 30% in the 1990s to 14.3% this year, but an estimated 300 to 500 Zambians still contract HIV every day, according to the Guardian. Transmission remains high in the country’s urban centers and industrial copper belt, and rural communities are especially affected because of a lack of access to health facilities, chronic shortages of trained health care workers, and cultural stigma and discrimination associated with HIV/AIDS.

According to the Guardian, the European Union-funded Antiretroviral Treatment Community Education and Referral program, run by the International HIV/AIDS Alliance Zambia, since 2004 “has been trying to bridge this gap between health care services and local communities” by building networks of support groups for people living with and affected by HIV/AIDS.

“The idea is that these groups will play an active role in shaping and delivering HIV/AIDS treatment and services to their local communities, by encouraging the uptake of treatment and testing,” the Guardian reports. More than 200 HIV-positive volunteers also have been trained as treatment support workers and community mobilizers and now provide in-clinic services such as counseling and outreach programs, including home-based care services to complement existing antiretroviral programs.

The Guardian reports that the program is so successful that it has been adopted by the International HIV/AIDS Alliance Uganda, where there are now more than 1,200 volunteer “network support agents” working in more than 400 health facilities across 40 districts.

Nevertheless, the Guardian reports that an increasing reliance on volunteers in Zambia has caused concern among some government officials. Albert Mwango, national antiretroviral treatment coordinator at the Ministry of Health, said,

“The health system and donors have discovered that these volunteers are a very useful resource to plug the chronic staff shortages we have in our national health system,” adding, “Just as the volunteers get dependent on their small monthly stipend, so local health staff end up depending on volunteers. But when they burn out or leave because there is another better paid volunteering job somewhere else, the system suffers.”

Following the government’s 2005 decision to provide antiretrovirals at no cost, there are now 220,000 Zambians receiving treatment, compared with 15,000 in 2004, the Guardian reports. According to the health ministry, there are an additional 150,000 HIV-positive people who should be on antiretrovirals but cannot be reached because of deficits in trained health care workers who can run drug distribution programs (Guardian [1], 11/24).