Zambian Government Rejects Mopani’s “Force Majeure”
Zambia said on Tuesday that Glencore has declared “force majeure” and will shut its copper mines in the country due to the coronavirus, adding that the government would block the move which would put 11,000 jobs at risk.
Mines Minister Richard Musukwa said Glencore plans to put its Mopani Copper Mines (MCM) operations under “care and maintenance” for three months from Tuesday as the global coronavirus outbreak weighs on copper prices and restricts the movement of key staff.
“The Government of the Republic of Zambia rejects this attempt by Mopani to put the mines in Kitwe and Mufulira on care and maintenance because it does not conform with the Law,” Musukwa said in a written statement.
A Glencore spokesman had no immediate comment on whether the company had taken such a step.
Triggering a force majeure clause in contracts allows certain terms of an otherwise legally binding agreement to be ignored because of unavoidable circumstances.
“This situation does not amount to force majeure,” said Musukwa.
“The Ministry is not aware of any event that has happened that is beyond the reasonable control of MCM and which makes mining impossible.”
He also said Glencore did not provide the Zambian government with the required 24-hours’ notice of the closure. He said the move could see 11,000 people lose their jobs and accused the company of seeing an opportunity to lay off staff.
“We are a pro-poor government who were elected to ensure that Zambian workers are protected and where there is justification we will allow the laying off of people but not in this situation where we clearly have MCM fishing for reasons to lay people off,” said Musukwa.
Mopani Copper Mines said on March 20 that it was reviewing its business in a bid to slash spending as lower copper prices and uncertainty caused by the pandemic took their toll.
Benchmark prices for copper have fallen around 17% so far this year as the COVID-19 pandemic dents demand worldwide.
MCM, which produced 119,000 tonnes of copper in 2018, is 73.1% owned by Glencore, 16.9% by First Quantum Minerals and 10% by Zambia’s mining investment arm ZCCM-IH.
Source: Reuters
