Mining companies lay off 4,000 workers in Tete, Mozambique

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Mining companies lay off 4,000 workers in Tete, Mozambique

3:29 CAT | 18 Aug 2016

Notícias (File photo)

About four thousand mining jobs in Tete have been lost since last year as a result, in part, of the continuing fall of coal prices in international markets.

The head of the Department of Mineral Resources at the Provincial Directorate of Mineral Resources and Energy Tete, Portásio Aurélio, quoted by Notícias, released the figures while addressing the Provincial Conference of the Youth Council, saying that that mining company Vale Mozambique has dismissed most workers – 2,348 of the total 3937 fired.

In the same period, Vale dismissed 520 of 535 foreign workers across the province for similar reasons.

Aurélio pointed out that the international financial crisis has forced companies involved in the exploitation of mineral resources, particularly in Moatize where the bulk of them operate, to reduce entities providing services due to high financial costs.

“In the face of the international financial crisis, mining companies have had to lower their costs because markets have fallen considerably, pushing some investments and businesses into failure,” he said.

If the situation does not change in the near future, some of these companies are at risk of losing their investments, particularly in infrastructure such as processing plants and logistical ore transport.

For Mozambique, the operation of the mining industry below full strength will contribute to the reduction of jobs and an economic slowdown, with lower tax revenues and the postponement of planned coal exploration projects.

Talking about Tete in particular, pointed out the drastic reduction in the number of customers and air traffic, as well as the volume of trains carrying coal on the Beira-Tete route and the volume of goods for the province’s supply network.

Meanwhile, the mining of coal yielded taxes worth 166,323,664,460,000 of the 5,591,040,000.00 meticais projected for 2016 in the first half of the year.

“In short, the continuous depreciation of the price of coal on the international market is affecting the industry, resulting in reduced demand for labour, low production and the stoppage of branch companies, and contributing to the weak socio-financial development country,” Aurélio concluded.

Source: Notícias