ZAMBIA MINING BACKLASH

By Paul Ndiho
Date:02/16/10

Chinese and Asian investors in Zambia are coming under fire from Zambia's main opposition for allegedly mistreating local workers in Africa's top copper producing nation.
Chinese and other Asian mining firms employing local people in their Zambian operations pay scant regard to workers, safety or local culture, according to Zambia's opposition. The opposition says that granting foreign mining investors special treatment by the government is a political and racial powder-keg. Patriotic Front leader Michael Sata, who has a fair chance of unseating President Rupiah Banda in 2011 elections, says the special tax status and "economic zones" given to foriegn mining companies is a ridiculous idea.
"Why should there be special conditions for the Chinese and Malaysians? Why should the Chinese and Malaysians come and participate in a mixed economy with all other nationalities? Why should they have special treatment? Why should they have discriminatory treatment? And after all, the Chinese and Malaysians are newcomers to Zambia."
Sata lost a closely contested election in 2008 to Rupiah Banda's Movement for Multi-party Democracy.
If his two-party opposition coalition holds together, he has a good chance of ousting Banda next year, according to some analysts.
It's unclear how his anti-Chinese rhetoric sits with Asian mining firms that now dominate Zambia's Copper Belt, although he has said nationalization of the mines is not an option. Zambian Mines minister Maxwell Mwale dismisses Sata's claims that Chinese mine bosses are duplicating China's poor mine safety conditions in Africa, but he did admit to a difference in approaches.
"They have their own home country cultures and we, as a host country, we have our own host country culture so it's basically as a host country to see that at some point the two cultures have to converge so that we have a win-win situation and personally I believe it's us, as a government, to enforce since we are the ones who carry out the oversight role to see to it that they conform to our work culture."
Economic analyst Chibamba Kanyama says there concerns about giving incentives to select investors.
"The critical thing at the moment is that the development agreements that govern these investments are not fully disclosed to the general populace and as a result people are not very sure as to whether this extends to one economy having an investment in another economy but without following the regulations of a given country and whether this is an extension of one country into another without following the physical incentives and really paying back to the government."
Kanyama says that there is a possibility that voices will be raised questioning the agreements between the government and Chinese investors.
“I definitely may foresee that in future somebody will raise to question these incentives and these initiatives by government so the bottom line right now is to ensure that these investors don't only negotiate with one party but they put their money and lock into these investments and sink in their capital only after a thorough agreement and consensus by the host country in which they are investing."
Foreign mining companies in Zambia include China's Luwmana Copper Mines and Chambishi Copper Smelter.