Mine taxes no excuse for poverty wages

I noted a couple of days ago that the new mine taxes are likely to be used by all sides in the Zambian mining debate as leverage in making the same old arguments they always have. Mine companies seek to lower worker expectations about wage increments every year as negotiations approach. This year they have one more rhetorical arrow in their quiver of shaky arguments, most of which boil down, as usual to the position: we can't afford to pay miners a living wage. We have profits to make.

Happily the Zambian Government seem to be on the case. The Daily Mail reports that the Minister of Labour and Social Security, Ronald Mukuma, has advised investors in the mining sector against measures that will result in labour cuts and the imposition of a freeze on wage increments to make savings for payment of new mineral taxes.

Mr Mukuma said in an interview yesterday in Kitwe that there was no justification for mine owners to think of reducing their workforce or imposing such a freeze because they still remained viable even after the introduction of the new taxes.‘’The fact that they are supposed to pay the windfall tax does not mean that it has changed their financial status in anyway, they are still viable organisations. Therefore, there is no reason for them to reduce the labour force,’’ Mr Mukuma said.

The first mine at which tensions seem to be running particularly high is Mopani Copper Mine (MCM), although NFC-A have also linked threats of wage restrain to the new taxes. Instructions have allegedly been given to personnel managers at MCM to identify areas where the mine could reduce the labour force to ameliorate the mineral taxes. MCM Chief Services Officer, Passmore Hamukoma, declined to give details of the new measures. However, he said management would consider the interests of Zambia.

Mr Mukuma said government’s priority at the moment was to reduce unemployment levels because that was the best way of reducing poverty.‘’The excuse of tax for reduction of labour cannot be accepted by government. They have to give another reason, not the reason of tax that government has introduced,’’ he said. Mr Mukuma said government was extremely cautious when it arrived at the new tax figures because it took into consideration the fact that mines had to sustain their workforce and make reasonable profits. He said the action government took was fair and in the interest of the country and that the mines should not create an impression that government was unjustified in introducing the new mineral taxes.‘’We took all that into account and found that it was a fair action by the government. They should not show a picture that government took this action without taking a lot of things into account,’’