Zambia backs miners - though they won't back Zambia
Published by MAC on 2008-03-10
Zambia backs miners - though they won't back Zambia
10th March 2008
As workers revolt against derisory pay at Zambia's Chinese-owned Chambisi copper smelter, the government says it will set up a free-trade zone to favour Chinese companies.
Meanwhile, the country's Chamber of Mines has demanded that the proposed 25%" windfall tax be slashed by half.
Zambia, China to sign free zone deal
By Haggai Chilabi, Reuters
5th March 2008
LUSAKA (Reuters) - Fifty Chinese companies plan to invest over $800 million in a tax free zone in Zambia within the next five years under an agreement to be signed shortly, Zambia's trade and commerce minister said on Tuesday.
Felix Mutati said the southern African country and China would sign an investment deal to allow foreign companies, mainly from China, to start construction at the Multifacility Economic Zone (MFEZ) in the Copper Belt town of Chambishi, 420 km (260 miles) north of Lusaka.
Negotiations between Zambia and Chinese authorities were currently under way and an agreement was expected to be reached soon for the companies to start setting up in May, Mutati told Reuters in an interview.
Zambia had planned to allow only Chinese companies to invest in the zone. But Mutati said there was a change in policy.
"Initially we had agreed that this should only be a Chinese zone, but they (Chinese) want other foreign firms to come and invest in the multi-facility economic zone," said Mutati.
"We are looking for a cocktail of companies that will add value to our raw materials to use the Chambishi zone. China is helping to attract other foreign companies on our behalf."
Preliminary data provided by China indicated that the Chambishi zone would generate in excess of $900 million per year in turnover by firms that would invest in the processing of copper into finished products.
Zambian officials have not given details on which Chinese companies would invest in the zone but China Non-Ferrous Metals (Group) Co Ltd. is one of them.
China has drawn fire from Western nations and aid groups, who accuse Beijing of turning a blind eye to misrule, corruption and human rights abuses.
China argues it is spreading prosperity in the world's poorest continent where the West has failed.
Zambian President Levy Mwanawasa has vowed to fight political opponents who try to limit or frustrate Chinese investments in the mineral-rich southern African nation.
The growing presence of Chinese firms in Zambia has prompted an anti-Chinese backlash in some parts of the country, with the main opposition party accusing Mwanawasa of allowing the Asian newcomers to exploit workers.
Workers riot over pay at Zambia's Chambishi smelter
By Shapi Shacinda, Reuters
4th March 2008
LUSAKA (Reuters) - Workers at Zambia's Chinese-owned Chambishi Smelter rioted over pay on Tuesday, injuring a Chinese manager and damaging property as a wage dispute entered a second day, a union official told Reuters.
"There was some kind of rioting and one Chinese manager sustained a cut on the lower lip after he was hit by a stone," National Union of Allied and Mining Workers (Numaw) secretary Albert Mando told Reuters by telephone from Chambishi, 420 km (263 miles) north of the capital of Lusaka.
He said workers who went on strike on Monday gathered outside the smelter on Tuesday and hurled stones at managers inside. "Another Zambian manager was also injured on the leg while some property has been destroyed," Mando added, saying police were called in to break up the riot.
"Police have managed to calm the situation, but the workers are still gathered outside the smelter ... They are demanding improved conditions of service and better salaries," said Mando.
Numaw officials were in talks with management at the smelter to resolve the pay dispute, he said.
Union president Mundia Sikufele told Reuters on Monday the workers stopped work after learning that salary negotiations between the Chinese managers of Chambishi Smelter and the Numaw had collapsed.
Sikufele declined to state how much workers at Chambishi were paid, but confirmed they were demanding salaries ranging from $325 to $400 per month. A government official close to the negotiations told Reuters workers were now paid about $80 in monthly pay.
Chambishi Smelter, which will cost more than $200 million to construct, is part of China's planned $900 million investment in the mining town of Chambishi, which the government has turned into a tax-free economic zone to attract Chinese investment.
Copper production is Zambia's main economic activity and the vast copper mines are a major employer in the southern African country of 12 million people.
Chinese beaten up in Zambia mines
Some Chinese mines in Zambia have poor safety records
4th March 2008
http://news.bbc.co.uk/2/hi/africa/7277006.stm
A Chinese manager at a copper smelter in northern Zambia has been admitted to hospital after being assaulted by workers demanding better conditions. An estimated 500 workers at the Chinese-owned Chambishi mine site started throwing stones at the managers as they attempted to hold talks.
Police came in to restore order and rescue the Chinese who had taken refuge by locking themselves in their offices. Several buildings were burned in the violence and a protester was injured.
Last year, China's president cancelled a visit to Chambishi fearing protests.
A blast at the copper mine killed 50 people in 2005.
Holiday rumours
Chambishi Smelter, which is under construction, is part of a huge multi-million dollar Chinese investment in the area.
The BBC's Boyd Chibale in Kitwe says a kitchen for Chinese workers and a guard's house were set alight and hostel windows smashed in the violence.
Our correspondent says the workers have now gone home, and the Chinese management are in talks with the unions. The protest was sparked by rumours that members of the Chinese management team were about to go on holiday, which workers feared would delay negotiations to improve their conditions of service.
"The Chinese are not respecting Zambian labour laws," workers' representative Teddy Chisala told the AFP news agency.
In recent years, China has emerged as one of the biggest buyers of Zambian copper.
But correspondents say Chinese investment in mining and manufacturing has not been without controversy - with constant industrial disputes amidst allegations of poor working conditions. In elections in 2006, opposition candidate Michael Sata ran on an anti-China ticket, calling for "Zambiafor Zambians".
Zambia mine owners offer counter tax proposals
By: Reuters
3rd March 2008
Foreign owners of Zambian copper mines have proposed a 12,5% windfall profit tax, rejecting the government's proposed 25% rate, a senior industry official said on Monday.
"I am not able to say whether we will make headway or not," Frederick Bantubonse, head of the Chamber of Mines of Zambia (CMZ), told Reuters after the group offered counter-proposals on the mining taxes.
Evans Chibiliti, Secretary to the Treasury, was quoted by state media on Monday as saying the government would press ahead with new taxes despite the new suggestions from mining firms.
In January, the government proposed a windfall profit tax at a minimum of 25% and an increase in mineral royalty to 3% from 0,6%.
It also plans, from April 1, to introduce a variable profit tax at 15% on taxable income above 8% and to raise corporate tax to 30% from 25%. Foreign firms could be prohibited from mining copper if they did not pay the taxes
The CMZ has also proposed a variable profit tax be raised to taxable income above 16% from the government-suggested minimum of 8%.
"If (the government) desires to impose variable profit tax in preference to windfall tax ... it should be considered as 16% in place of the proposed 8% in the (law)," the CMZ said in a proposal submitted to parliament.
CMZ said that instead of introducing a flat rate of 3% mineral royalty, the government should introduce the tax at 1%, graduating to 3% with price increases. The corporate tax rate should remain at current 25%.
The group said the money raised through higher taxes should be used to help generate more power, following the costly energy outages suffered in January, and waning capacity.
Mining companies say the government plans would result in excessive taxes and also argue that they were not consulted on the proposals.