Zambia's president says won't take over struggling mines

November 26, 2015 12:27 PM

Vedanta Resources' Zambian unit Konkola Copper Mines KCM) said it would mothball its loss making Nchanga underground mine by the end of the month.

Zambian President Edgar Lungu speaks before attendees during the 70th session of the United Nations General Assembly at the U.N. Headquarters in New York, September 29, 2015. REUTERS/Eduardo Munoz

Zambia does not plan to take over mines that have shed jobs after a sharp fall in global copper prices, President Edgar Lungu said on Thursday, backtracking from a warning earlier this month that the state would take over such mines.

Lungu said the economy would grow at a slower pace than previously estimated due to the struggling mining industry and electricity shortages, but that government would implement austerity measures to cope with the decline.

"The government can run the mines but we have no intention to take over the mines," Lungu said, adding that government tried its best to keep the job losses to a minimum and that the troubles in the sector would lower economic growth.

On the job losses in the mines, Lungu said during a speech from his office that the government had tried its best to keep the job losses to the barest minimum.

"We would have lost all the jobs if we insisted on no job losses. The mines have told us why these jobs are being lost. The challenges in the mining sector are bound to continue. The government can run the mines but we have no intention to take over the mines," he said.

Lungu earlier this month warned that he would not allow Glencore's local unit to lay off workers.

The company has been cutting its copper output to support flagging global prices.

Vedanta Resources' Zambian unit Konkola Copper Mines KCM) said it would mothball its loss making Nchanga underground mine by the end of the month.