By Sinkamba Peter-Green Party President
August 22 at 5:46pm
As the Green Party, we extremely nauseated by Mopani Copper Mines (MCM)’s threat to retrench 4,000 miners if Copperbelt Energy Corporation (CEC) sticks to cost-reflective tariffs. We find this threat, when the electorates are paying even at higher rates a perfect example of corporate impunity bred from protectionist policies. The threat is actually an insult to the Zambian Government and its people.
If MCM proceeds to implement its threat, we urge Government to invoke its golden share to outvote all other shares in on this issue. The golden share held by Government in all mines gives the Government the right of decisive vote, thus to vote all other shares, in a shareholders-meeting.
The golden share, which is entrenched in all vesting agreements for the privatized mines is designed to prevent stake-building above a certain percentage ownership level, and to give Government veto powers over any major corporate action, such as retrenchments or sale of a major asset or subsidiary or of the company as a whole or indeed any action deemed to be of on-going importance to national interests, for example for reasons of national security and national economy.
As we the Greens have always stated, protectionism in the mining sector, entrenched through Development agreements (Das), and other agreements, such as bulk power supply agreements, has had a negative effect on economic growth and economic welfare. This policy has hurt consumers in general, and suppliers and manufactures and workers not only in mining but other sectors as well. It is exactly for this reason that the late President Levy Mwanawasa scrapped the DA clauses in 2008 following the enactment of the Mines and Minerals Development Act of 2008. It is high time that Government revisited and scrapped other protectionist legacies in the mining sector.
MCM needs to be reminded that ZESCO, which generates power in question, was financed through Eurobond money to the tune of US$250 million. Add interest to this loan, the total due in 2022 from the ZESCO Eurobond is US$500 million. Where will the Zambian people get this money to repay this loan if MCM is going to get subsidised power? Where is the justification for subsidised power to this mining company when the price of copper on the world market has increased by 30% from US$4,200 last year to US$6,000 at the moment? Where is the justification when CEC has proposed a meager 10% tariff increase to mining companies when the voters are paying 75% tariff increase? Where is the justification, when all other mines are paying the increased tariffs, some of them paying even higher than 10%, despite all their challenges of dewatering?
The solution to end this MCM impunity lies in Government invoking its golden share, if Government is serious with national security and national economy. It is only through the golden share scheme that Government can bring sanity to the mining sector, such that where need be, Government should nationalize the mining operation.