Zambia Chambishi Copper Smelter Resumes Output, Labor Talks Start

Mar 28, 2011 (Dow Jones)Zambia's Chinese-owned Chambishi Copper Smelter has restarted output after workers agreed to end a strike over a wage dispute over the weekend, a union official said Monday.

Most workers reported for the afternoon shift on Saturday and by Sunday, all the 600 workers were available at the plant, Sikufela Mundia, the President of National Union of Miners and Allied Workers, told Dow Jones Newswires by telephone from Kitwe on the Copperbelt.

"Output has resumed and it is expected to peak before the end of the week," he said. "We are now going in for talks with management and we hope to resolve the misunderstanding soon."

Output at the 150,000 metric tons-a-year smelter was halted for at least three days last week after workers went on strike, rejecting management's offer of 12% pay rise. The workers are demanding a 50% pay rise.

Chambishi Copper Smelter is a joint venture between China Nonferrous Metals Co.(8306.HK) and the Yunnan Copper Group (000878.SZ).

Union officials said Chinese-owned enterprises pay the lowest wages on the Copperbelt; lower paid miners at other mines receive around $520 a month while their counterparts with Chinese companies get around $350 a month.

A Chambishi spokesman said that management is likely to review the earlier pay offer in order to end the standoff. Zambian miners cite higher copper prices and inflationary pressure to justify their wage demands.

Chambishi smelter treats copper concentrates from several mines in Zambia, among them Toronto-listed Equinox Minerals Ltd.(EQN.T), which owns Lumwana Copper Mines; First Quantum Minerals Ltd. (FM.T), owners of Kansanshi Copper Mines; South Africa-based Metores Ltd. (MTX.JO), owners of Chibuluma Copper Mines; and NCFA Mining's Chambishi Copper Mines, a unit of a subsidiary of China Nonferrous Metals.

Last month, China Nonferrous Metals said it had started a $250 million expansion program aimed at doubling copper output to 300,000 tons a year next year.