Mine suppliers on the Copperbelt have complained over the 40 per cent discount announced by Konkola Copper Mine (KCM) early this week for every order given to suppliers.
Speaking in an interview with ZANIS in Ndola today, one of the suppliers, Thomas Banda, who is also proprietor of Honanda Zambia Limited, said the move will make the local suppliers unprofitable because they bear a lot of costs in purchasing mining equipment which they supply because they order almost all the equipment from outside the country.
Mr Banda called on government to intervene on the matter to ensure that local suppliers can benefit from the mining industry.
He said the move seems to be one of the company’s ways of cushioning the impact of the dropping copper priceS on the international market and the global financial crisis on it.
Mr Banda noted that it would be unfair for KCM to directly transfer the negative impact of the business crisis to suppliers who are already struggling in business.
He further observed that the major mining companies on the Copperbelt rarely gave orders to local suppliers in preference to foreign suppliers.
Early this week, KCM announced that it will demand a 40 per cent discount for a supply orders it awards to suppliers.
And Roan Constituency Patriotic Front Member of parliament, Chishimba Kambwili, yesterday strongly condemned the demand by KCM, as it would push the local suppliers out of business.
Copper prices on the international market have continued to spiral downwards with the price standing in the range of $4,000 to about $5,000 from about $8000 in the past few years.
The drop in the copper prices coupled with the global financial crisis is likely to affect the operations of the mines and force them to make desperate operational adjustments for them to continue making prices.
ZANIS/ENDS/LNN/EB.
prices have reduced hence we all have to expect less from exports. sorry what do you expect with people like banda, mulongoti, vj in control.
ba copper copper mwanya, ulupiya takuli
Its a simple matter of mathematics instead of the discount imposed on suppliers why not look for cheaper suppliers from somewhere else as a supplier if you think the price is not right look else where.
Do you always have to look to government sure, why do you start these businesses anyway.
Dont supply them and see if they can find them at the price they are demanding. I am sure there are others who will manage to get the same items at a cheaper price. Its called a supply chain for a reason if you have no buyers at the price the manufacture also looses they will have to reduce as well.
JOE U DONT SEEM TO HAVE ANYTHING TO SAY,PLZ SPARE US SPACE
In just two months these guys have managed to wreck everything fat Albert built. $1 to K4,466. Inflation is at 16%, they won’t report it. Ba kambwanga. Whoever takes over is going to have to promote other industries. I think we have shifted too far from agriculture and we need to promote that. In the long run its what we need. Copper prices may continue to plunge.
#4 NON-PARTISAN, just make your comments. No need to be posting your stuff about #2. You are wasting space too. I could have been #4 were it not for you. #2 shame on you for starting this. I could have been #3 were it not for you.
Rili cnt undastand such a busines decision..hw do u force pipo into such a huge discount..wats agreed upon in th contracts wth these suppliers coz they hav a right to sue for breach of contract..
Politicians this is the main issue on the copperbelt We need a strong political will to put things straight. Were in the world you have this kind of open economy, sale are kept offsore. Chilipamushi Davies you are a lecturer in economics and currently holding a stratage position in GRZ and cant put thinks the way you teach economics shame on you.
We follow this Indians like Small pupies.
IF YOU SEE A BLACKMAN RUNNING…..
he’s being chased by the police!
IF YOU SEE A WHITEMAN RUNNING…….he’s just exercising!
IF YOU SEE AN INDIANMAN RUNNING…… he’s got a sale in his shop, so he’s in a hurry to open the store!
IF YOU SEE A CO LOURED RUNNING…….. The bottle store is about to close!
And if you see a CHINESE running? Sata has won the elections
Where in the world do you ask or seek for a discount of 40%.Thats like slapping a man and then telling him how to cry
#9 thats very funny. LOL
It’s a global thing. Everywhere you go things are bad. All the same 40% is way too much
13.finga
business is about being craft.we need to own and run our own industries hence dictate both the buying and selling price.zedians don’t produce or manufacture finished goods to sale on the international market. instead of complianing find a sustainable solution.
The investors are scared of SATAEN…
elo lwanya, we said it when LPM gave the mines to the indians these guys dont know mining its unfortunate whats happening and the most unfortunate thing is that this is just the beggining of the end to come.
Its merely a ploy to cut off local suppliers. One of the few attractions of having successfully run but foreign owned mines was the potential to benefit local suppliers who thrived during the good times. However, the process has always been plagued by corruption involving supppliers and KCM employees. A good proportion of prices charged by suppliers was used to pay off fixers within KCM. Management was not strict when copper prices were high. Lower copper prices translate to lower revenues which cause management to have tighter control over expenditure.
The issue of high prices and low business deals is a worldwide topic. Lets wait till USA concludes its elections, then business gets back to normal, if a small country like Zambia goes to polls businesses are shaken let alone USA. though 40% is a bad side a demand.
Ba Pumbafu mwachilamo uku saplier umwela. How can you buy something at $2.00 and sale it @ $20.00. Only in Zambia can you make such profits. I think KCM should demand a price list from the wholsalers and put a cap on profits not exceeding 100%.
KCM must have done their homework and concluded that they were being supplied with overpriced commodities.In fact they know for a fact that most suppliers will go out of business if KCM cuts them off,so the suppliers are now faced with a challenge,they need to bring in effciencies in their sourcing of goods and stop giving KCM buyers unduly high “nchekelako fees”.
What a load of rubbish. How do you ask for a 40% discount. These suppliers need to earn a living and all goods are sourced outside the country as you are aware that zambia doesnt manufacture most the equipment and items ordered. This doesnt make business sence. KCM is making enough money even with drop in copper price. I support the comment from PF MP Chishimba Kambwili.
It is CRIMINAL for KCM to demand 40% discount. Where in the world have you heard of such nonsense? When KCM was enjoying the high prices of Copper, did they give suppliers 40% interest? That is the problem when you give away all that matters for the country. A Mwenye will MILK ZAMBIA till the last drop of blood.
Happy Independence Anniversary ; Away with thieves!!!
It’s ok, we already make a killing on each order!
What KCM is simply stating is that suppliers should make 60% profit and not 100% as these suppliers are pure crooks.they are the ones behind unjustified rentals,plots etc. let them reduce.
#21 you have made alot of sense, ba mwenye takes all the profits kumyabo lilia fyapipa ati give us 40% discount…its mockery!!
How did they come up with 40%? These are some of the issues our Government should stand up against. They need to compare the prices with something before they demand a 40% discount.
MMD says it has made Zambia a good place to invest in.Very true.These investors get all the benefits while we grin in amusement how many are scrambling to come in.Does Mutati or Magande ever pause to consider the benefits to the country ?From the grins on their faces, I doubt.
For the fist time I can put Nyama Soya Sugar Daddy to good use. let him declare all KCM purchases reduced by 50%. and let him also reduce the prices where suppliers are buying from by 75%. Everyone will be happy KCM and Suppliers. And and only then shall we vote for him.
Too bad, 40% sounds too much. But how did KCM come up with that amount? Do they have other suppliers who deliver at 40% less? If you run a business you normally shop around, you get 3 quotations then buy from the cheapest. This is normal business procedure. I am sure these suppliers also shop around before they buy to sell to KCM. If other people can source and make a profit at 60% price tag then those complaining will have no ground for complaining, as this will expose their ineffeciency in sourcing. If no one can deliver at 60% then KCM will not have supplies. Pure business sense.
IF YOU SEE A BLACKMAN RUNNING…..
he’s being chased by the police!
IF YOU SEE A WHITEMAN RUNNING…….
he’s just exercising!
IF YOU SEE AN INDIANMAN RUNNING……
he’s got a sale in his shop, so he’s in a hurry to open the store!
IF YOU SEE A COLOURED RUNNING……..
The bottle store is about to close!
And if you see a CHINESE running……
Sata has won the elections is out to kick them out…..
KCM management is right, they know that most suppliers make over 500% profit. A friend of mine came down here in SA bought 6 Warman pumps for $2500 each and supplied them to Metorex in Kalulushi for $12,000 each
If what 30 says is right then the company’s procurement department must be daft or corrupt.With the internet it should be easy to browse for costs of items by manufacturers/retailers easily.
#9 u are very funny.lmfao
ba copperla uv made enaf ist paybacktime sory guys