16 November 2012

Zambia: Local Mine Suppliers Short-Changed

THE Mine Suppliers and Contractor Association Zambia (MSCAZ) has said foreign suppliers and contractors have continued to benefit from the mining sector at the expense of the local ones.

MSCAZ president Fanwell Banda said foreign owned businesses were taking advantage of the absence of clear guidelines on doing buiness with mining companies and were now profiting from the boom in copper production and high prices.

Some foreign owned mining contractors and supplier firms are taking advantage of the Mines Act's silence on the amount of business allocated to locals and also failure to distinguish between a Zambian owned and a foreign-owned firm registered with the Ministry of Mines as mine contractor and supplier.

"Because of lack of restrictions foreign companies do business on their own minus partnering with Zambians creating a situation where few Zambian Small and Medium Enterprises (SMEs) are benefiting from the current high production the mining sector is experiencing," he said.

Mr Banda said mining firms which were owned by foreign investors were now expanding and experiencing a business boom but the local firms were doing badly.

"Most of our leading mining firms are recording high production and for the first time in three years meeting their monthly targets. The benefits from the gains in the mining business currently being experienced was not corresponding to local contractors and suppliers," he said.

Mr Banda said local contractors and suppliers' capacity had greatly improved apart from having high expectations from the Government and mining companies in terms of accessing business.

Mr Banda said local entrepreneurs were still expecting stakeholders such as the Government and mining companies to come up with ways of supporting the creation of business opportunities for local firms.

He said currently, there were no clear policy guidelines on the best way to see the local firms and Government could be maximising in getting a fair share of the benefits from the mining business in the country.

Mr Banda said there was need for the Government and mine owners to hear the cry of the local contractors and suppliers who were part of the SMEs sector which play a leading role in employment creation.

He added that the decline in business from the mines was causing desperation on local suppliers and contractors who were now resorting to forming other associations aimed at lobbying for business from the mines instead of speaking with one voice.

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