21 February 2013

Zambia: Govt Takes Over Collum Coal Mine

The government has with immediate effect revoked all the three small-scale mining licences held by Chinese Collum Coal Mine in Sinazongwe in Southern Province and taken over the operations.

Mines, Energy and Water Development Minister Yamfwa Mukanga announced yesterday that the Government has with immediate effect cancelled all the three small-scale mining licences operated by Collum Coal Mining Industries Limited for failure to comply with the law.

Mr Mukanga said following the cancellation of the three licences, the Government, through the ZCCM-Investment Holdings, had taken over the running of the mines and would continue to operate them until a suitable investor was found.

"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.

"I would like to state that the Government is not in the business of nationalising the mines but in the business of running the Government," he said.

Addressing journalists in Lusaka, Mr Mukanga said Government would support responsible investors in the mining industry whose operations were in line with the provisions of the law.

"Government will not hesitate to cancel other non-compliant and inactive mining rights including prospecting licences where holders fail to remedy the default as directed by my ministry," he said.

The minister said his ministry, through the Mine Safety Department, had been undertaking regular inspections to assist the mine remedy persistent breaches.

The mine failed to pay mineral royalty to Government and did not commence production on some of the mining rights since they were granted.

He said the mine had had a history of poor safety, health and environmental compliance, mainly resulting from employment of non-qualified people.

Further, the company has failed to meet statutory obligations such as declaration of mineral production and payment of mineral royalty to Government in excess of KR5 million.

Mr Mukanga said arising from that, the Government invoked the provisions of Section 102 of the Mines and Minerals Development Act and given Collum Coal Mining Industries Limited a default notice on August 16, 2012.

"The company was given a period of 60 days within which to remedy the anomalies cited in the default letter, failure to which the licences would be cancelled. The 60 days expired on October 16, 2012 without any response to the notice or remediation of all the anomalies cited, the Government has decided to cancel all the three licences," Mr Mukanga said.

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