In what may be a worrying sign of increasing resource nationalism, the Zambian government has with immediate effect cancelled the operating licence for the Chinese-owned Collum Coal Mining in Sinazeze thereby taking over operations.
Announcing the decision today, Mines Minister Yamfwa Mukanga said the mine will now be run by ZCCM-Investment Holdings.
The minister cited poor safety standards and failures to comply with environmental regulation under the Mining Act of Zambia.
The seizure of the Collum mine is the latest in a series government takeovers of businesses, which in the past have included the seizure of mobile telecommunications firm Zamtel and the reversal of a concession to Railway Systems of Zambia. In September, the Minister of Justice Wynter Kabimba stated that the Zambian government "will not shy away from repossessing all previous state firms."
Mr. Mukanga said ZCCM would be in charge of operations at Collum Coal mine until a new investor could be found to permanently taker over the mine.
"The mine fails to provide adequate sanitation facilities both on surface and underground and uses unapproved machinery at the mine," he said.
Mukanga said Collum Coal mine did not pay mineral royalty and was owing the country over K5 billion.
"In view of this, my ministry has, with immediate effect, cancelled all the three small-scale mining licences held by the Collum Coal Mining Industries Limited in Southern Province. Government has taken over the running of the mines and will continue to operate them until an investor is found."
Mukanga said the move would not lead to any workers losing employment.
"I therefore wish to appeal to all employees to remain calm as there will be no disruption of normal operations of the mine and there will be no job losses," he said.
Mukanga said government's takeover of Collum Mine did not amount to nationalisation as the asset had been seized to safeguard workers' and Zambia's interest.
In 2012, workers at the mine killed a Chinese supervisor and seriously wounded another in a pay dispute after the government raised minimum wages to K522,000.
In 2010, the Zambian police charged two Chinese supervisors at the Collum coal mine with attempted murder following the shooting of 13 miners in a pay dispute.