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Copper: Zambia’s biggest ‘curse’?

ALTHOUGH he fell short of calling it a curse, Andrew Sardanis was certainly on point when he said copper, for all its importance to the country’s economy, has also been its biggest hurdle, nay headache.
The latest headache involves mining companies threatening to lay off thousands of workers over Government’s 2019 budget, which includes an additional 1.5 percentage point increase on all mineral royalty tax bands, and an additional two royalty bands of 8.5 and 10 percent when the copper price exceeds US$7,500 and US$9,000 per tonne, respectively.
Further, mineral royalties will cease to be deductible from corporate income tax while sales tax, which is yet to be quantified, has replaced Value Added Tax (VAT).
Mr Sardanis, who negotiated the 51 percent sale of shares in the two mining giants Roan Selection Trust (RST) and Anglo American Corporation (AAC) to the Zambian government in 1969, says the sorry tale of neglect and oppression of the people of Zambia during the colonial period is just one legacy of the copper mining industry.
He says the concept of the Federation of Rhodesia and Nyasaland that caused so much disruption in the progress to independence and set back the country’s progress by a whole decade would not have been attempted without the copper mining industry to excite the greed of the white settlers.
“…It provided the financial backbone which was used to develop a white-dominated society that was determined to subjugate the owners of the land for its own long-term benefit, which it intended to drag out for decades if not centuries,” Mr Sardanis writes in his book, Zambia: The First 50 Years.
“Even in its final moments, when the Federation had lost the battle for existence, its prime minister floated the idea of dismembering the country and amalgamating Barotseland and the Copperbelt with Southern Rhodesia and Katanga in order to prolong the white domination of the wealth of the region.”
There was more.
The employment policies of the mining companies were designed to favour their white employees, who got generous salaries, lavish accommodation and social facilities, education and training for their children.
But perhaps the most important one was job reservation.
Mr Sardanis says African employees remained untrained and unskilled and underpaid. This was a deliberate policy that kept them on the lowest rungs of the employment ladder so that the plum jobs would remain reserved for the European mineworkers.
There is a case in point of Valentine Musakanya, the first Secretary to the Cabinet after independence.
Mr Musakanya, who was educated at St Francis Xavier College in Southern Rhodesia, had passed matric in Latin, English, Physics and Chemistry. He applied to train as an electrician at Nchanga mines, where his father was working, but was rejected because the company did not accept black apprentices at the time.
Mr Musakanya went on to read Philosophy and Social Sciences by correspondence with the University of South Africa, and the rest, as they say, is history.
“Even in the late 50s and early 60s, when independence was around the corner and the number of high schools increased and educated young men became available for training in skilled jobs, the mines shunned them. They did the same with university graduates,” Mr Sardanis says.
“As late as 1966, when I was the CEO of INDECO, I personally recommended for appointment a young Zambian (who knowing the discrimination in the industry had the guts to study for a PhD in metallurgy at the University of Newcastle) to the management of the Anglo American Corporation.
“Six months later, completely demoralised, he walked into my office and told me that he was still on a ‘familiarisation’ course and that at the time he was driving a crane at Nchanga mine.
“Another young graduate friend, with a degree in chemistry from the University of Salisbury, who had joined the mines a couple of years before independence, had been appointed in the mines’ education department to teach basic English to adult miners; he left and joined the civil service, immediately after independence.”
Mr Sardanis says mining companies were so beholden to the European Mineworkers Union that they were afraid to plant Africans as equals among them.
African advancement had been a sore point in Northern Rhodesia for decades prior to independence.
Mr Sardanis says it had been broached as far back as 1940 by the Forster Commission, which had been set up to report on disturbances on the Copperbelt during which 17 African workers were killed when soldiers of the Northern Rhodesia Regiment opened fire on them during a strike.
In his report, Sir John Forster QC, recommended that the mine management should consider with representatives of the government and the Northern Rhodesia Mine Workers Union [established in 1936 to represent the interests of the daily paid European workers; the African Mineworkers Union was not formed until 1949] to what positions which were not open to the African worker that he should be encouraged to advance to.
But the Northern Rhodesian Government effectively vetoed the idea on the grounds that white mineworkers who had enlisted for war service had been promised their jobs on their return.
“During the war, some dilution with African labour has been accepted, but it would be impossible to maintain Africans in posts previously occupied by Europeans to the exclusion of previous holders returning from the war,” the government stated.
For Mr Sardanis, what this extraordinary statement from the government admits is that African workers, as far back as the 40s, were capable of performing jobs reserved for the Europeans and they were doing so during the war when the Europeans were away fighting.
“Yet the industrial colour bar that existed before the war was officially re-imposed in a new agreement between the European Mineworkers Union and the companies immediately after the war ended,” he says.
“It bluntly provided that no African could be engaged in a job performed by a European.
Lawrence Katilungu, the President of the African Mine Workers Union, tried very hard to break it in the 1950s with a series of strikes, demanding higher salaries.
“His theory was that if the African workers started costing them too much, the mining companies would have to train them. But he was not successful.”
On Zambia attaining independence, the new government thought at long last, it would be able to shape the industry and make it respond to the needs of the people it had held back for decades.
However, neither the mine owners nor the European Mineworkers Union were prepared to give way. This led to a series of strikes and severe unrest on the Copperbelt.
So, in 1966, President Kenneth Kaunda appointed a commission of inquiry headed by then Attorney General of Tanzania Roland Brown to look into the problems of the mining industry.
The conclusion of the Brown Commission was that there was wide dissatisfaction with the conditions of service laid down by the companies. In other words, African advancement was not faring any better since independence.
But before the Brown Commission was appointed, Government had established a Zambianisation Committee comprising representatives of various ministries including Labour, Mines and Education as well as the African and European Mineworkers Unions and the mining companies, in order to put pressure on the industry for faster progress on African advancement.
But Mr Sardanis says the companies, together with the European Mineworkers Unions, showed willingness but were determined not to budge.
He says they engaged various types of consultants from South Africa who produced sophisticated-sounding schemes and charts to impress the committee that they were indeed trying but that they had to ensure that the safety of the mines and the levels of production were not put in jeopardy.
“In other words, the mines with tongue in cheek, were proposing, over a period of four years from 1966 to 1970, to reduce the number of unskilled workers by just 1,749, and promote 597 to part-skilled positions, 893 to semi-skilled positions, 163 to skilled positions, and increase the junior supervisors by 222, the section bosses by 1,017 and the shift bosses and foremen by 516; an upward movement of just over 5,000 in a labour force of over 40,000,” Mr Sardanis points out.
“And they tried to persuade the commission and the government that they needed four years to achieve this pitiful target.”
Mr Sardanis believes the Brown Commission did an admirable job in analysing every aspect of human relations in the industry.
“It even offered two alternative solutions to the problem of change houses and toilets which, of course, before independence were racially segregated. After independence, the segregation basis changed from race to rank but, as very few black miners were being advanced, the perception of racial segregation remained,” he says.
“The commission’s suggestion was: either adopt alphabetical separation in the use of the various facilities or use salary scales as the guide.
“Is it any wonder that the government lost patience with them and in 1969 sought controlling interest?”