Zambia warns miners to consult government on job cuts

Reuters

* Lusaka has been taking nationalist posture

* Message: you need our permission to cut jobs

By Chris Mfula

LUSAKA, Nov 13 (Reuters) - Zambia, Africa's top copperproducer, warned mining companies that any moves to lay offworkers without consulting the government would be seen as aviolation of their investment licences.

President Michael Sata, a populist who swept to power twoyears ago on an activist platform to defend workers' rights, hasbeen taking a hard line with miners and other foreign companiesthat have tried to lay off workers.

"It has been observed that some investors in some miningcompanies have found it necessary to downsize their workforceeach time they are faced with operational challenges," thegovernment said in a statement on Wednesday.

"Government views such actions as a violation of, and notwithin the spirit of the investment licence."

The government added that it was "unwarranted, unfortunateand unacceptable" for mining companies to cut jobs beforeconsulting the government and other stakeholders.

This week Zambia revoked the work permit of the chiefexecutive of Konkola Copper Mines, its biggest private sectoremployer owned by Vedanta Resources, as the latest movein a dispute over its plan to cut hundreds of jobs.

Sata's government also last month threatened to shutShoprite stores after the South African company firedworkers who went on strike over pay. Shoprite, Africa's biggestretailer, subsequently backtracked on the sackings.

FROM CONFUSION TO CLARITY

"You now have to go to the government to get approval forfiring workers. This clarifies that the cost of doing businessin Zambia, especially as it relates to labour, is higher thanpeople thought in the past," Chris Becker, Africa marketstrategist at ETM Analytics, said.

"They are trying to stake their position on this, and atleast it is giving some clarity now and we know what to expect,because there has been so much confusion the last few weeks,starting with Shoprite," he said.

Zambia is not alone when it comes to state or politicalintervention to protect jobs in a region where unemploymentlevels are high and subsistence farmers make up much of theworkforce, putting a high social premium on a regular wage.

Senior officials with South Africa's ruling African NationalCongress threatened the licences of Anglo American Platinum earlier this year over its plan to cut up to 14,000jobs as it tries to restore profits.

They also expressed anger at Amplats' alleged lack ofconsultation over the proposed layoffs. Amplats, a unit of AngloAmerican, has since pulled back its target under intensegovernment and union pressure.

Elsewhere in Africa such as in neighbouring Zimbabwe,government barbs are often aimed at investors from the west orSouth Africa, while pointedly sparing those from China, in partbecause of Beijing's policy of offering aid, soft loans andinvestment with no strings attached.

In Zambia, however, Sata's nationalist posture has in thepast also targeted Chinese investors, whom he has accused ofill-treating Zambian workers or of not providing enough jobs tolocals.

Mining companies in Zambia include First Quantum Mineral, Glencore International, Vale andChina's Jinchuan.

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