KONKOLA Copper Mines has failed to clarify allegations that it is winding up its operations in Chingola, opting to boost operations in Nampundwe and Chililabombwe, an action that may lead to major job losses while leaving Chingola a ghost town.
Konkola Copper Mines in Chingola is the single largest mine that has sustained the town.
This follows National Restoration Party (NAREP) president Elias Chipimo’s sentiments that Chingola would soon be a ghost town because KCM was winding up its operations from the mining town and transferring some of its workforce.
But when contacted for a comment three weeks ago, company public relations officer Shapi Shachinda told the Daily Nation that he would not make a comment on the issue through the phone and advised that the newspaper send a press query, which was done the same day.
Two days later, the Daily Nation made a follow-up on the query but Mr. Shachinda advised that his office was still consulting with top management and that he would get in touch as soon as a go-ahead to respond to the query was given by the company management.
But when the issue was followed up yesterday, Mr. Shapi said the company had decided that it should not respond to the issue.
“We (KCM) have decided that we should not respond to that issue and that is what we are going to do,” Mr. Shachinda said.
At his press briefing, Mr Chipimo warned that Chingola would soon be turned into a ghost town as the mining giant had started transferring some of its workers to its other operations in Nampundwe and Chililabombwe.
He said KCM commenced its secret operation recently and that a number of miners had since been affected and called on Government to intervene by forcing the company to stop decommissioning the mine plants.
He also appealed to the two members of Parliament in Chingola to take a keen interest in the matter and safeguard the livelihoods of the affected workers.
‘We call upon Joseph Katema (Chingola MP) and Wylbur Simuusa (Nchanga MP) to step up and stop this closure of KCM mine plants in Chingola before the town is turned into a ghost town,’ Mr Chipimo said.
And NAREP Communications Director Ezra Ngulube told the Daily Nation in an interview yesterday that KCM was contemplating pulling out of Chingola to reduce on the costs due to Mineral Royalty Tax which the company considered too high.
The Government has however proposed to reduce Mineral Royalty Tax for underground mining from 20 percent to six percent, effective July. Mr. Ngulube said KCM was considering pulling out in Chingola in order to compel Government to reduce the Mineral Royalty Tax even further.
“You know that the tax regime was too much for underground mining companies as compared to open pit mines and that had an adverse effect on the operations of KCM and that move was aimed at compelling Government to dance to their tune,” Mr. Ngulube said.
Meanwhile, some specialists in the mining sector have observed that the downward adjustment on the Mineral Royalty tax by government from 20 percent to in percent six percent was welcome, but would not sort out many challenges that mining companies faced as the rates were still high.
They observed that even with a further reduction of up to six percent on the part of underground mining, companies would have a very minimal impact on the investments in the industry as Zambia still had an exorbitant tax regime which did not lure those who wanted to invest in the country.
The specialists observe that while mining companies were subjected to this taxation, they still had an obligation to pay their workers decent salaries and were compelled to plough back into the communities where they operated through cooperate social responsibility.