January 5, 2008

Strike at Chinese copper smelter / Power tariff increase for copper mines planned

Over 500 Zambian construction workers have launched a strike over pay at the Chinese-owned Chambishi copper smelter. The employees of Chambishi Smelter, which is due to start processing copper from the Chambishi Copper Mine by August, began striking on Thursday, ZNBC radio has said. The Chambishi Copper Mine is a unit of China's NFC Africa. "The workers at Chambishi Smelter are on strike demanding better salaries and other entitlements which include (ground maize) meal, transport and holiday allowances," the report said. The workers blocked the main road leading to the smelter to prevent both Zambian and Chinese managers from entering the plant and vowed not to return to work until their demands were met, said ZNBC. There was no immediate comment from Chambishi Smelter management. The strikers are not members of any unions.

Copper production is Zambia's main economic income and the vast mines are a major employer. Chambishi Smelter, whose construction is said to cost more than US$200 million, is part of China's planned $900 million investment in the small mining town of Chambishi, which the government has turned into a tax free economic zone to attract Chinese investment. The strike is the latest in a wave of industrial unrest since 2007 in Zambia's Copperbelt region.
In the meantime, plans to raise electricity tariffs for its copper and cobalt mines after the southern Africa nation increased domestic power charges by 27 percent have been announced. Hanson Sindowe, chairman of the Copperbelt Energy Company (CEC), the sole distributor of power to Zambia's vast copper and cobalt mines, said tariff rise negotiations were almost concluded with various foreign mining firms.
Officials say that plans to raise power tariffs were aimed at making state power utility Zesco economically viable and to ensure Zambia reaped greater benefits from profits foreign mining firms were reaping from higher global metals prices. CEC purchases power from Zesco and distributes it to the mines. Before, the International Monetary Fund (IMF) Board proposed that Zambia should raise electricity tariffs in its end of year review of the country's economic performance. The IMF said raising tariffs would enhance the development of the energy sector. In the early 2000s Zambia had agreed with the IMF and the World Bank to reduce state participation in the state-run power utility Zesco in order to continue to receive financing from multilateral institutions. The state Energy Regulation Board (ERB) said separately that it had allowed Zesco to raise power tariffs for domestic users by 26.8 percent and by 1.3 percent for other industrial users. (Rts)


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