Destitute Zambian Mineworkers Dream of Copper Market Rebound

Maybin Chibale had a steady job for four years at Glencore Plc’s Mopani mining complex in northern Zambia’s Copperbelt Province. Then came the global commodity slump.

Now he spends his days drinking beer with former colleagues and worrying how he will pay school fees for three of his four children. Chibale, 47, who used to earn 3,470 kwacha ($305) a month, saw most of his final pay check and severance package equivalent to more than a year’s income go to repay a bank loan. These days the family survives on what his wife can earn as a street trader.

“I’m destitute,’’ Chibale said in his one-room, cinder-block home in the Wusakile slum in Kitwe, Zambia’s second-biggest town. “Maybe if the copper price improves we’ll go back; that’s what we’ve been promised.”

Chibale’s story mirrors that of Kitwe, a mining town of more than half a million people living in a sprawl of cinder-block homes surrounded by glitzy shopping malls, towering mine shafts and waste dumps about 280 kilometers (174 miles) north of the capital, Lusaka. Today it’s home to thousands of unemployed miners and their families who’re rapidly depleting their savings and descending into grinding poverty. Residents say malnutrition, prostitution and crime are burgeoning.

Economies Slammed

Across Africa, the commodity price downturn spurred by slumping demand from China has slammed economies from Nigeria to South Africa. Zambia, which relies on copper for more than 70 percent of its export earnings, has been particularly hard hit. More than 10,000 workers have lost their jobs since late last year, as plunging prices for the metal left mines unprofitable and power shortages hobbled production.

The economy grew last year at the slowest pace since 1998, and the kwacha has slumped 44 percent against the dollar since the start of 2015, more than any other African currency.

President Edgar Lungu’s government, threatened with losing elections in August because of mounting discontent over the nation’s financial meltdown, has been encouraging unemployed miners to take up farming until the copper producers resume hiring.

Job Cuts

“We have been very, very supportive of the copper mines because we know of the problems they have been going through,” Mines Minister Christopher Yaluma said in an interview in Cape Town. “We have allowed them to reduce the labor force.”

For Steward Siyakulipa, who operates a grocery stall in Kitwe, that has meant declining business because many of his customers eat a single daily meal of corn meal and vegetables. “No beef, no sausages, no chicken and chips,” he said.

“We can’t sell these,’’ Siyakulipa said, shaking a packet of oily bread rolls. “People are not coming to buy because they don’t have money, they are not working. In order to survive, they just go for the cheap things.”

Beyond the job losses, consumer spending power has also been eroded by the kwacha’s slump, which has spurred inflation to a 13-year high of 23 percent.

School Dropouts

Jennipher Mushota says 50 children have dropped out of her private Gilos school in Kitwe’s Twibukishe area since the start of the year because their families can’t afford the tuition. Of the remaining 247 pupils, more than half are behind on their Payments .

“Parents usually paid fees just when school opened in January,” Mushota said as she flipped through a school register. “Now many are paying bit by bit. It’s a very big challenge. We are just limping along.”

While copper has rallied 4.4 percent this year on the London Metal Exchange , it’s still trading at less than half the record $10,190 a metric ton it reached at the height of the commodities boom in November 2011.

Even if the rebound continues, Zambia’s copper industry will probably remain in the doldrums until 2018 when Glencore resumes full production at shafts and plants that scaled back or halted output in October. The Swiss company, headed by South African billionaire Ivan Glasenberg, plans to invest $1.1 billion in Zambia to refurbish the Mopani complex and lower production costs.

“Nobody at this point in time is thinking of closing their shafts,” Mines Minister Yaluma said. “They are working flat out to get ready for the next boom.”

A turnaround can’t come soon enough for Lazarous Silungwe, 44, who worked for Mopani for 18 years before being fired from its metallurgical processing plant. He’s sent off 10 job applications without a response.

“It’s not easy,” he said while seated at his dining table in his home where he lives with his wife and two children. “I keep on trying. I have to hold onto my money and spend bit by bit.”

To contact the reporters on this story: Matthew Hill in Kitwe at mhill58@bloomberg.net, Mike Cohen in Cape Town at mcohen21@bloomberg.net. To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Karl Maier

By: Matthew Hill and Mike Cohen

©2016 Bloomberg News