Glencore: The hidden cost of the commodities trading giant's great African retreat

http://www.independent.co.uk/news/business/news/glencore-the-hidden-cost-of-the-commodities-trading-giants-great-african-retreat-10496007.html

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Mining communities in Zambia and the Democratic Republic of Congo fear they will be devastated by Glencore’s decision to shut down in the region for 18 months.

The commodities trading giant said this week that it would mothball its operations in the countries due to the low copper price. Around 20,000 workers in Zambia rely on Glencore following privatisation of the state-owned plants in 2000, while 13,000 are employed in DRC, local industry officials said.

The Independent has established that the Congolese number is far higher than the 4,000 previously reported, as 9,000 miners also work as subcontractors to Glencore.

Speaking anonymously through NGOs in the region, miners spoke of their anger at how they had been kept in the dark about the “devastating” decision. “We only heard about it on the news. The company should have told us directly,” said one, speaking through the Afrewatch NGO.

Afrewatch’s executive director, Emmanuel Umpula Nkumba, said: “This will have a big, big impact. All the local societal life, all the local economies, are built around mining. They are very sad and simply don’t know what they are going to do.”

Congolese miners called on the DRC government to ensure Glencore pays compensation and consults with its Ministry of Labour, as required by law for such massive lay-0ffs. Glencore said it would abide by all local laws, and that it would need to retain some workers to maintain the mines during the standstill. Chief executive Ivan Glasenberg said he had “spoken to the local authorities”.

But Mr Nkumba said: “We tried to talk to the government about this but they said they simply do not know what is going on. They tell us, ‘We have not got that information from the company’.” He added that while some smaller mining operations had been closed due to the fall in commodities prices, this was the first that is critical to the region.

Meanwhile, the Zambian mining minister Christopher Yaluma said his government would discuss the closure plans with Glencore’s Mopani subsidiaries.

The London-listed Vedanta has also said it will shut down some operations in the region due to falling prices.

Glencore’s shares closed down 7.84 per cent last night at 132.9p.