Glencore Should Not Impose a New Investor for Mopani Copper Mines in Zambia
By Dr. Chris Patricks
As thing heat up and the UPND government is in the process of finding a credible investor for Zambia’s Mopani mines, which Glencore sold for 1.5 billion in a clear and unethical maneuver of mineral wealth looting, HH find himself with yet another hurdle as it seems Glencore would want to influence the investor the government will pick.
Glencore, a global mining and commodities trading company, has recently come under scrutiny for its questionable actions in Zambia. These actions bear resemblance to its controversial dealings in Chad, which resulted in significant financial losses for the African country. Glencore’s debt restructuring practices and alleged corrupt dealings with the previous Zambian government has raised concerns about the company’s ethical conduct and its impact on the host countries’ economies.
In Chad, Glencore’s debt restructuring of nearly $1.4 billion had severe consequences for the country’s economy. As Chad heavily relies on oil profits as its primary source of revenue, the debt burden significantly affected its ability to fund essential services and development projects. The debt restructuring occurred following the 2014 oil price crash, exacerbating Chad’s financial struggles.
Drawing parallels to its actions in Chad, Glencore is now facing similar accusations in Zambia. The company sold its shares in Mopani Copper Mines to the previous Patriotic Front (PF) government for $1.5 billion. However, this transaction has raised concerns about possible corruption and questionable motives behind the deal.
Critics argue that Glencore’s sale of Mopani shares to the Zambian government was a questionable and corrupt move. The lack of transparency surrounding the deal and the alleged involvement of political interests has raised suspicions about the fairness of the transaction. These concerns highlight the potential negative impact on Zambia’s economy and the welfare of its citizens.
If history repeats itself, Zambia could face similar challenges to those experienced by Chad if Glencore is allowed to impose an investor who will be controlled by them. In essence, Glencore would be fronting one of its hidden companies.
This move would bring back the tactics of tax evasion and under declaring of minerals, making it almost impossible for Zambia to pay back its debt to Glencore and this may put a significant burden on Zambia’s already struggling economy. The country heavily relies on copper exports, and any mismanagement of its mining industry could have severe consequences for its financial stability and development prospects.
Glencore’s actions in both Chad and Zambia raise ethical concerns about the company’s conduct. Critics argue that Glencore’s pursuit of profit may come at the expense of the host countries’ economic well-being. The lack of transparency and alleged involvement in corrupt practices further tarnish the company’s reputation and credibility.
In the past, Glencore’s track record in Zambia was marred by allegations of tax evasion. It was accused of under-declaring sales and manipulating prices to avoid paying its fair share of taxes. This practice not only deprived the Zambian government of much-needed revenue but also hampered the country’s ability to invest in infrastructure, education, and healthcare. Allowing Glencore to influence or impose a new investor for Mopani would only perpetuate this pattern of tax evasion and further harm Zambia’s economy.
Furthermore, the company has also been accused of environmental damage, unsafe working conditions, and disregard for local communities. Allowing Glencore to continue its operations through a new investor for Mopani would only perpetuate these exploitative practices, hindering Zambia’s sustainable development and the wellbeing of its citizens.
Glencore’s operations have also sparked social concerns in Zambia. The company has been accused of neglecting the welfare of its employees and local communities. Issues such as poor working conditions, low wages, and inadequate safety measures have been highlighted. The mining sector, which should ideally contribute to poverty reduction and socio-economic development, has instead been associated with worsening inequality, displacement of communities, and limited local participation in decision-making processes. These social concerns have further exacerbated tensions between Glencore and Zambia, increasing the perceived investment risk.
As Glencore’s actions in Zambia mirror its past actions in Chad, concerns about the company’s conduct and its impact on host countries’ economies continue to grow. The debt restructuring practices and alleged corruption surrounding the sale of Mopani shares raise questions about Glencore’s commitment to ethical business practices. It is crucial for both the Zambian government and international stakeholders to closely monitor Glencore’s activities to safeguard the country’s economic interests and ensure transparency and accountability in the mining sector.
*_Dr. Chris Patricks is Associate Professor in the Department of Political Sciences and Director of the Centre for Mediation in Africa. He also publishes on multilingualism in higher education and journalism studies.
He is a former award-winning journalist._*