Your Excellency, Members of the MMTA, Teachers & Pupils of Ansford School in Somerset, Teachers & Pupils of Mufulira High School, Ladies and Gentlemen, Welcome to the National Liberal Club & thank you for not being put off by the word ‘donation’ on the invitation.
In my left hand I am holding a piece of copper sulphide ore from the Mufulira copper mine in Zambia (1480 metres down). To give some perspective, the present face is twice as deep as the San José mine (where the Chilean miners were trapped in 2010).
Most copper ores are sulphides and this piece from Mufulira is not very different to copper ores all over the world. The process of smelting and refining is essentially the process of liberating sulphur (as well as iron and silica) to get pure copper.
The problem for Mufulira is that for many years the sulphur that was liberated during smelting and converting went straight to the atmosphere, rather than being collected in an acid plant. Up in the air, above the town, SO2 & SO3 mixes with moisture to form sulphurous acids (commonly known as acid rain).
Each day, as the wind blows from east to west across Mufulira, where 300,000 people live, a large percentage blows onto, or precipitates into, the areas of Kankoyo and Kantanshi, which are now desertified. It also falls on the schools and the people. Crops may not be grown here, and for those already debilitated by TB & AIDS it can also cause death. In a report I read with regard to sulphur emissions at Mount Isa in Australia, where a friend of mine was a doctor for over a decade, it was said that the effect of sulphur emissions could be felt 1000 km away.
In my right hand I am holding a small bar of 99.9% pure copper.
The world needs copper. In fact the world needs about 15 mln tons of it each year. Without it, you would have no internet, no electronics, no vehicles on the road and no pipes in your house. (I wonder how many of you know that every car on the road, with all the electronic gadgets has between 20-50 kgs of copper per vehicle).
So, copper is important to the world. And Zambia is rather important to the copper story. It is the 8th largest producer in the globe, responsible for 5% of that 15 mln tons of world copper production. At today’s prices, it is worth about US$8 bln.
Mufulira, the town from where we are welcoming 15 students today, is at the heart of an exchange programme between UKs Ansford High School and Mufulira High School that has been going for almost 20 years. It is a link of partnership and multi-layered friendship, in which both sides have learnt much. In 2007, in search of a way to express the MMTAs recognition of the communities from where metals come, we chose to link with and support this programme. And today, in this room we have the evidence of this relationship.
Mufulira is, for us, an example of all mining communities. We could, as easily, have chosen towns in Peru, India or China. But we chose Mufulira because it is a name that resounds through the last century of the metal trade as one of the most famous brands of copper to be listed on the London Metal Exchange – a name we all learnt when we started our jobs in the metals business.
Mufulira, at the heart of the copper belt is where copper was found by the British in 1923. By 1933 the golf club had opened. It is now the deepest copper mine in Africa.
In those days the ore was rich – at the surface it was said to be almost 5% Cu. Today, at 1480 metres, it averages 2%. But, to put perspective on this figure, in the whole of Chile (the world’s largest producer of copper at 5 mln tons) the average Cu content in the ore is no more than 0.5%! In other words the ore brought to the surface in Mufulira is four times richer than in Chile.
So, when miners are told by the owners that their jobs are not safe, it is frankly not to be believed. So long as the world needs copper, the world will need Mufulira. So now we come to the question.
If $8 bln per year of copper leaves Zambia each per year, of which about $2 bln in value comes from Mufulira, why is Zambia poor?
Why is it that the people who mine what I have in my left hand, do not see the benefit of the revenue of the metal in my right hand?
That is a question that should occupy us all. Unless we wish to continue to have a colonial or patronizing attitude to Africa – for Zambia does not so much require aid, as, merely, fair-dealing. There is the name of a company, I have not mentioned with regard to Mufulira which is, as it were, the ‘elephant in the room’. That is to say – Glencore.
I did not mention it because in Mufulira it is a name that is almost unknown. How is it, you may ask, that a company that has more power over the 300,000 lives in Mufulira than the sovereign government of Zambia is not known by name? Perhaps it suits the owners that way.
The only name by which the mine and smelter is known is Mopani – the name of a Zambian tree.
So this is the first pre-requisite to start correcting the problem, those that have power over people’s lives need to show their face.
The second is the question of tax. Under development agreements established in 2000, when the copper industry was forced to privatize in return for IMF/World Bank support, Glencore was one of the main beneficiaries and, in May of this year, this company, whose head office is in the low-tax area of Zug in Switzerland, launched the largest Initial Public Offering (IPO) in history, making some of its managers multi-billionnaires and its CEO, Mr Ivan Glasenberg, worth US$7 bln. For comparison his worth is 50% of the annual GDP of Zambia.
The issue for our times is that, if the world values copper and commodities so much, is it not also right that this wealth is shared equitably with the countries from where the metal comes?
In the case of Mufulira, we have petitioned that Glencore install new converters to remove the sulphur pollution that is blighting the town. It is now said, in a report dated July 7th by Royal Bank of Canada Capital Markets, that the first new converter will be installed by December 2011 with a second by December 2012. It is something that locals regard as long overdue.
But sulphur is just a symbol of the disregard shown by foreign companies for local people. What is needed is much more. Issues to be addressed include – the clean-up and re-invigoration of acidic desertified land, homes affected by subsidence, leaching of tailings into the Kafue River, the state of roads caused by huge ore lorries. The Zambian Government and the Zambian Revenue Authority needs to examine the way in which tax is levied on the copper industry which represents 70% of GDP and how tax collection may be made more effective and equitable for all. Only in this way will the services of hospitals, schools and roads and other infrastructures be improved in order to lift this most intrinsically wealthy of nations out of the poverty basket – a basket in which it should never have been placed.
(A version of this speech was delivered at the MMTA’s Mufulira Lunch at the National Liberal Club in London on July 20th 2011)