CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
by Tshib. Lubowa, Congo RDC, September 1999
THEME = ECONOMY
12,000 employees have been laid off - a further 4000 are under threat
After much hesitation, at the end of July 1999, Gécamines (Générale des carrières et des mines [Office of Quarries and Mines]) terminated the employment contracts of about 12,000 staff out of a total of 26,000. The towns of Likasi, Lubumbashi and Kipushi in Katanga were the most seriously affected by the decision.
The victims of the closure of so many mines, factories and associated services were those who had been employed for less than 5 years, volunteers for early retirement and those of retirement age. With no redundancy payments, those who were laid off were able to draw some social security benefits, such as food payments, medical care and free primary and technical level schooling for their children. This was the theory, at least, since Gécamines has serious financial problems. The company is gradually terminating the contracts of groups of employees. Some may be taken on again if necessary.
The intention of the board of management since April 1999 has been to reduce the workforce to about 10,000 in the short term. For almost 60 years, the company has been the main source of income for the State (70%). The target means that about 4000 other employees are still in jeopardy. These drastic steps have been made possible by the direct intervention of the head of State, Mr. Kabila, who disregarding the advice given by his Minister of Mines, Mr. Frédéric Kibassa Maliba, supported the decision of Gécamines board of management, chaired since 3 November 1998 by Mr. Billy Rautenbach, a Zimbabwean of British origin.
Many reasons are given by the PDG for this decision: "Top-heavy managerial structure; too many administrative staff; many people without constructive work to do; expensive foreign representatives without apparent returns; huge debts which mean our suppliers are refusing to do business with us and are threatening seizure of assets; lack of discipline at all levels; a tendency to "delegate upwards" rather than take decisions where they should be taken; management failure to make the necessary changes; lack of maintenance and investment; a significant level of poor management, corruption and theft, etc." The results of an audit put figures on this: "Out of 100% of the management staff, 28% work in production and 72% in the administrative sector; out of 100% of the workforce, 48% work in production and 52% in administration."
The most obvious reason for the dismissal of 12,000 employees is the fall in production. The company's annual output is 475,000 tonnes of copper, 16,000 tonnes of cobalt and 72,000 tonnes of zinc; in fact, in 1998, Gécamines produced only 35,000 tonnes of copper, 4700 tonnes of cobalt and 1250 tonnes of zinc. Taking only copper as an example, in 1987 the company produced 494,109 tonnes, while in 1991 this dropped to 236,071 tonnes, in 1993 48,312 and in 1998 37,000 tonnes.
This drop in production is matched by the drop in the price of copper on the world market. The monthly revenue of Gécamines is valued at 6 million dollars, while employment costs (before laying off 12,000 staff) are 4 million dollars, and operating costs are also about 4 million.
The previous Prime Minister, Professor Mulumba, in his book "A predatory management adrift" found six causes for the collapse of Gécamines: poor operating and technical management conditions, which resulted in the caving in of the most important mine at Kamoto (Kolwezi); the unreliable investment plans; the product marketing and supply circuits; poor management of human resources; undertaking of operations which are not part of the company's normal activities; and the heavy tax burden. Added to these are the politicising of the company, "forced, unprepared katangisation" during the process of ethnic cleansing carried out against people of Kasai origin, initiated by the previous Prime Minister Nguz Karl Bond and the previous governor of Katanga, Gabriel Kyungu wa Kumwanza.
As regards the social purpose of the company, the state authorities are trying to save what they still can, since its descent into Hades in 1992. For this reason, on 3 November 1998, Gécamines entered into a partnership with the Zimbabwean mining company Ridgepoint Overseas Developments Ltd., hoping for an injection of fresh capital. This did not happen, however. The expert opinion is that Gécamines needs at least 2.5 billion dollars investment to achieve its installed capacity.
On 28 August, in Kinshasa, the secretary-general of the Ministry of Mines, Mr. Nsapu, stressed that out of the 21 projects intended to boost Gécamines' production activities, 16 have already found partners, and 6 have begun. These projects involve the Tenke- Fungurume seams, which are to be exploited with the Lundin company; the Lwishishi seam to be exploited in a joint venture with EGMF; the Twilezembe seam to be exploited with Swannepoel; the Kasombo 1 and 2 seams to be exploited with EGMF and the Mining Union. A joint-venture project is also planned with OMG and EGMF to process the slag from the Lubumbashi plants, as well as rehabilitation of the Kamoto mine, the factories of Kolwesi and Luilu with the ISCOR company. There is also the Anvil Mining project for the Dijulushi and Kapulo copper, which will cost 40 million dollars.
All these projects should allow Gécamines to achieve an annual output of 503,300 tonnes of copper, 91,000 tonnes of cobalt and 12,500 tonnes of zinc. This will save thousands of jobs in this company.
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