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ZCCM Investiment holdings urged to take over COLLUM COAL MINE

Lusaka, February 25, 2013, ZANIS —  The Zambia Chambers of Commerce and Industry ( ZACCI ) has urged the Zambia Consolidated Copper Mines  Investment Holdings ( ZCCM-IH) to take over the operations of the embattled Collum coal mine.

ZACCI  Vice President –South  Chabuka Kawesha says his organization ZCCM-IH should consider taking over operations to ensure continuity of all operations at the coal  mine.

“  ZCCM-IH must address the flows that lead to government’s decision being that of repossessing the mine, “ he said.

ZANIS reports that Dr. Kabwesha said this in a statement in Lusaka , today.

He explained that operations of Collum coal mine as represented through various media reports over the past years have raised concerns.

“ And we believe the appropriate ministries and other government offices had more detail and information hence the decision taken by Government, “ he said.

He added that his Institute believes that ZCCM-IH may within its powers and in the shortest possible time, appoint or select a small group of local Zambian mining experts to manage the facility by going forward.

“ We believe that ZCCM-IH may within its powers and in the shortest possible time, appoint or select a small group of local Zambian mining experts to manage the facility going forward and bring it to profitable levels with the right framework of employee engagement and sustained visible philanthropic support to the local community, “ he said.

He explained that as a nation we have the capacity to identify local or internationally based professional Zambians with credible credentials to manage the mine and the new managers should go to the local and international finance markets for operational capital for Collum Coal Mine going forward.

Dr Kawesha suggested that the appointed team should first identify a revival strategy for the operations and enable sustainable operations with minimal government support.  Thereafter look for equity partners in addition to working with ZCCM-IH.

It is not a secret that foreign run mining companies go for syndicated finance options or to international capital or financial institutions like the IFC, African Development Bank and many others to finance huge projects which are capital intensive, he explained.

“ Therefore, the team of Zambian managers should put up a bankable document and obtain finance from either local or foreign financial institutions so as not to place any burden on the government,”  said Dr. Kawesha.

The Chamber says the Ministries of Finance and Mines and the ZCCM-Investment Holding (IH) should appoint a team of professional Zambian in the areas of administration, mining and finance to revive and operate the Munali Nickel mine in Mazabuka.

It adds that the team should also consider restoring national assets at the coal mine in similar lines like at Zambia Railways led by an ably qualified Zambian engineer can be replicated to our mining facilities.

We all know it’s a long stretch for government to finance Professor Chirwa’s positive and well-intended project. And at some stage local or international financial institutions have to come into play by way of financing the national and inter-town rail networks.

The ZACCI Vice President –South  has further suggested that the Ministry of Finance, Ministry of Mines and ZCCM-IH should appoint separate teams of Zambian experts in the areas of administration, engineering, finance and mining to undertaken the operations of the Collum Coal Mine and Munali Nichel Mine both located in Southern Zambia.

“ Each team should, just like foreign mining operators based in Zambia or elsewhere do, go to the international or local capital markets to raise operational capital or indeed invite in an equity partner or two,” he said.   

Alternatively ZCCM-IH should call for "expressions of interest" or "request for proposals" as a matter of urgency for both mines. EOI or RFP opens the playing field and guarantees strong partners, he concluded. 

Government recently took  over a Chinese-run coal mine where managers once opened fire on its Zambian workers during a labor dispute.

Mines and Minerals minister Yamfwa Mukanga  explained that that government had seized control of Collum Coal Mining Industries Ltd.

Mr. Mukanga said the Chinese managers had not addressed safety, health and environmental concerns at the mine, had also failed to declare production and had not paid royalties to the government.

There has been a history of problems at this mine. Two Chinese managers were accused of shooting coal miners there during a labor dispute in 2010.

Clashes at the mine in August reportedly saw one Chinese worker killed and two others injured.

Labor conflicts at Chinese businesses in Zambia are pointed to as examples of problems with Chinese investors across Africa.