Sunday, April 19, 2009

Zambian mine lays off 1,300 staff

Zambia's biggest copper mining company, Konkola Copper Mines, has laid off 1,300 workers as it struggles with a fall in both demand and copper prices.

The redundancies represent about 10% of the company's entire workforce.

Konkola said it was embarking on a programme to streamline operations and increase labour productivity in response to falling copper prices.

Many of Zambia's mining companies have been forced to make dramatic job cuts during the global economic downturn.

Price slump

Last month, the Mineworkers' Union of Zambia said about 8,200 jobs had been lost in the sector since December last year.

Copper accounts for a large proportion of Zambia's exports.

The price of copper has fallen dramatically since the summer of last year, when it stood at almost $8,000 (£5,500) a tonne.

By the end of the year, it had dropped to just over $2,800 a tonne.

The price now stands at more than $4,500 a tonne after a major stimulus package in China, the world's biggest consumer of copper, raised hopes that demand for the metal would increase.

More recently, the price has jumped on reports that China is rebuilding its state reserves of the metal, according to Mark Elliot at Fairfax Investment Bank.

But Mr Elliot says the price if copper is notoriously volatile and could slip back if confidence in global demand takes another hit.

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