Speaking in an interview in Kitwe yesterday, Association President Augustine Mubanga said its members failed to realise significant business opportunities due to the poor performance of the mines, especially on the Copperbelt.
“The challenges surrounding Konkola Copper Mines and Mopani Copper Mine greatly impacted negatively on the suppliers and contractors as operational activities were reduced as well as business opportunities,” Mr. Mubanga said.
Glencore, the owners of Mopani Copper Mine are on the verge of exit the Zambian market while KCM is under liquidation with no investment being pumped into the mine for almost the whole year as the government seeks for a new investor to take up the mine when the legal stand-off between Vedanta and ZCCM-IH is concluded.
Mr. Mubanga also cited the COVID-19 pandemic as another major factor that contributed to the low business opportunities for the suppliers as most mines had to downsize on labour while others went on care and maintenance as a result they could not offer any meaningful business to the suppliers and contractors.
Explaining the impact of the COVID-19 pandemic which he said has also restricted the movement of cargo from import markets , the Association President stated that the global pandemic made it difficult for Zambian suppliers to buy goods for supplying as most goods supplied to the mines are imported.
“ Suppliers are now hoping that government will intervene in 2021 by putting measures that will create a win-win situation between the mines and the local suppliers as the copper prices sour on the international market, “ he added.
He said the mines should look at the high copper prices as a motivation to increase their production and also reduce the cost of production so that they remain sustainable so that they give more business opportunities to local suppliers and contractors.
“We are hoping to see a situation where preference should be given to local suppliers and with the coming in of the Statutory Instrument on local content, we want to see a situation where the mines are in the forefront to drive support into manufacturing, industrialization and also giving long term assurance in terms of contracts to those that have already started manufacturing products that mines are consuming,” he said.
He also stated that there is need to ensure that the mining sector begins to significantly plough back into the communities they operate from through Corporate social responsibility so that the local people also benefit from the current high copper prices as much as the mines are making profits.
Mr. Mubanga also challenged the government to protect the local suppliers who are currently sidelined in terms of getting a business opportunity from the mines.
“Government should promote more Zambian companies to supply because at the end of day government will benefit more through the taxes that will be collected from these companies through pay as you earn taxes from the workers of these supplying companies, corporate taxes again from the same companies, and other taxes in addition to the mineral loyalty tax from the mining companies,” he noted.
He noted that the government is losing all these revenue generation avenues when supply contracts are given to foreign companies.
The year 2020 has been a challenging year for almost all business sectors mainly due to the Covid-19 pandemic and the instability in the performance of the Kwacha which has continued tumbling against the United States Dollar.