Zambia's new President Sata sets new mining rules for China

Days after Michael Sata, the populist opposition leader with the anti-Chinese rhetoric, won election as new president of Zambia, Chinese mine investors gave their Zambian employees a raise.

At the Chinese-owned Chambishi Copper Mine in this Copperbelt town, mine operator Hedges Mwaba, received two different paychecks: one for his usual salary of 2.9 million kwacha ($600 US) and another 4.8 million (about $1000).

Mr. Mwaba assumes this was a mistake, of course. But he also says it indicates that the mine owners were worried enough about a possible victory by Mr. Sata’s Patriotic Front party that they prepared two separate runs of paychecks: a standard run in case Sata lost, and an 85 percent raise in case Sata won.

“What is weird is that I got two pay slips,” Mwaba tells the Monitor. “It looks like the Chinese had prepared for any outcome of the election by printing two pay slips for us for the month of September. If the incumbent Movement for Multi party Democracy MMD [incumbent President Rupiah Banda] had won the presidential election, we would have been paid old meager salaries. But we got almost double the money because the opposition Patriotic Front led by Michael Sata won the election.”

As the largest copper producing country in Africa – some $2 billion worth by the end of 2010 – Zambia is more than just another landlocked African country to the People’s Republic of China, a country whose ongoing economic expansion have made it the world’s largest copper consumer. Sata’s victory has been seen by many as a sign of growing disaffection among Zambian voters who felt that Zambia was not getting a fair share of the mineral deals signed by previous Zambian governments. Some business leaders here fretted that Sata’s rhetoric might scare off foreign investment. But for now, the general mood is one of rapprochement, with Sata voicing moderation and Chinese investors promising good corporate behavior.

Soon after Sata’s victory, China’s new ambassador to Zambia, Zhou Yuxiao, was the first to pay Sata a congratulatory visit, and Chinese President Hu Jintao has issued Sata an invitation for a state visit to Beijing.

Investors won’t leave Zambia, says Lusaka-based economic consultant Bob Sichinga, because, frankly, the demand for copper and other minerals is great enough that mining companies have plenty of profit margin to spare.

“The Chinese and other investors will not leave because even when mineral royalty and other taxes are raised, the mines will still be making good profit,” Mr. Sichinga says. “Government has known that they are not receiving their fair share of mineral wealth. But the new government wants things to change so that Zambians will also benefit.”

Burnishing their image

The sudden pay raise at Chambishi Copper Mine is perhaps a belated effort for Chinese mine operators to burnish their image, an image that has been tarnished by abusive treatment and violence against Zambian employees.

In 2005, five Zambians were shot and wounded by managers during a riot of mineworkers at Chambishi Mine.

Five years later, Chambishi’s shootout was repeated five years later by another Chinese-owned company – Collum Coal Mine – when two Chinese managers at the mine shot and wounded 12 miners who were protesting against salary delays. The incident left two miners critically injured and the two managers arrested. But charges against the two managers were dropped when the mine management offered to compensate the injured miners.

In December of the same year, Collum Coal Mine was in the news again when a Zambian miner was reported to have died in police cells after he was detained because of a dispute he had had with one of the mine managers.

Human rights activists in Zambia say that Chinese investors have held the worst record in terms of negligence and abuse of Zambian employees.

A sign of things to come?

Joseph Katema, a Chingola-based parliamentarian from Sata’s party, says that the Chinese pay raise at Chambishi is the beginning of better things to come for Zambian mine workers under the Patriotic Front (PF) government, which promised to initiate major economic development changes within the first 90 days of assuming power.

The Chinese mine investors knew the right thing to do under the previous government, Mr. Katema says, but they took advantage of the weak and corrupt leadership of the previous Movement for Multiparty Democracy (MMD) government.

“The Chinese investors are here to make profit, so if they can get away with abusing and, even, not paying workers because of a corrupt or weak government, they would gladly do that,” Katema says.

At his meeting with Sata, Ambassador Zhou promised to assist the new government in ensuring that investors of Chinese origin observe local labor laws.

“The Chinese policy is that all Chinese nationals working in other countries respect local labor laws,” Zhou said, “they must observe the laws of the land anywhere in the world.”

Sata reportedly replied, “When your countrymen adhere to local laws, there will be no need of pointing fingers at each other.”

China, ever vigilant at maintaining relations with the government in power, extended an invitation to Sata to pay a state visit to President Hu. Sata's response was cool. “I will respond to the invitation soon,” he told Zhou.