Zambia wants Glencore to cough up two assets

The government of Zambia isn’t taking the consequences of falling metal prices lying down.

Echoing a deal it made with Anglo American (AAL-L) back in 2002, the government wants privately held Glencore International to surrender two of its copper mines to the government rather than shut them down.

The move would allow the government to keep the mines running thus protecting the jobs and the local economies built around them.

Glencore says the two mines in question, Mufulira and Nkana, both of which are copper mines, have been operating at a loss and would need copper to touch US$5,500 per tonne to be economical.

Copper has been selling in the US$3,700 a tonne range.

In a statement mine’s minister Maxwell Mwale said the government would not accept the closure of the mines.

In 2002, Anglo American handed over its Konkola copper mine to the government during a similar low copper price environment.

The government also says it wants to avoid the closure of other mines including the Mopani copper mine which is a joint venture between Glencore and First Quantum Minerals (FM-T).

The plan comes at a time when the country is suffering from other mine closures and massive layoffs.

Mwale also said in a government release that the country will continue to count on Chinese companies for support  – which he said have maintained its workforces.

Unions in the country often complain about the awful labour conditions at the Chinese run mines, and Mwale called on them to end their hostility towards the Chinese.