Foreign mining firms face up to 50% wage hikes in Zambia

Bloomberg reports when wage talks in Zambia's resources sector wrap up before the end of the year when current agreements expire foreign miners operating in the country could face steep hikes in labour bills.

Mineworkers Union of Zambia President Chishimba Nkole told the newswire that the talks affect the largest players in the country including Glencore International (LON: GLEN), operator of the Mopani copper mine and processing complex, Vedanta Resources (LON: VED) and its Konkola venture, Jinchuan Group’s Chibuluma mine and  China Nonferrous Metals' Luanshya operation:

"While pay demands at most operations are for increases of less than 50 percent, “we feel there is the justification in some cases, where the wages are very low,” for raises of that percentage, Nkole said by mobile phone en route to Kitwe, about 360 kilometers (224 miles) north of Lusaka, the capital.


"First Quantum Minerals Ltd. [TSX:FM], where the Zambian Industrial Relations Court in September awarded workers a 13 percent increase this year and 12 percent in 2013, Nkole said."

Pay and working conditions have become a thorny issue in Zambia particularly when it comes to the many Chinese-run mines in the country. Chinese investment in Zambia reached $2.4 billion in 2011 equal to roughly 20% of the southern African nation's GDP.

The issue is also keeping the pressure on president Michael Sata who took office on the promise of improving mining conditions and a bigger share of mining profits for Zambians following protests at Chinese-owned copper mines and a brief ban on metal exports to sort out revenue collection in Africa’s top copper producer.

Chinese-run copper mines in Zambia are routinely mistreating workers and breaking the law by imposing up to 18-hour shifts and flouting international health and safety standards, according to a Human Rights Watch November 2011 report.

Zambia produces roughly 660,000 tonnes of copper a year and is a top 10 cobalt supplier. Small quantities of gold and silver are produced, mainly as a by-product of copper mining.