At least three hundred workers at Sandawana Mine in Midlands province face the chop as the global commodity slump takes its toll on local mining companies in the lithium sector, The Weekly has learnt.
Management at the subsidiary of diversified mining group Kuvimba Mining House (KMH) summoned an internal workers committee in a closed-door meeting to inform them of the impending sweeping layoff on the backdrop of viability challenges triggered by the drop in lithium prices.
According to Forbes in one year, the cost of lithium has dropped a staggering 80%. Lithium prices currently hover at approximately $13600 a ton as of December 18th, 2023, from a record high of $80000 a ton in 2022.
Sandawana general manager Godwin Gambiza told workers that the short-term contracts of 308 workers were terminated on 31 January with workers offered two weeks’ notice severance pay according to sources privy to the development.
A member of the committee who spoke on condition of anonymity said the unprecedented move has left workers in limbo, with the firm also stating that it is sourcing foreign currency to settle the salary arrears.
Workers at the struggling firm have revealed that their January salaries have not been paid as management is reportedly battling to access foreign currency.
“We were called as workers’ committee this afternoon by Sandawana management, and the meeting was chaired by the GM. We were told that the Sandawana mine was struggling financially due to the lithium price fall. Hence management has seen it worth to downsize workers by 308 with immediate effect of today 31 January,” said the source.
“Criteria used is not renewing expiring contracts of January and February, but for February contractors they will be paid 2-week notice pay. The bad part is our January pay is still not paid and management promised RTGS payments first and US$ is being sourced for.”
Zimbabwe Diamond and Allied Workers Union (ZDAMWU) has since released a cautionary statement of the impending en masse retrenchments in the lithium sector, largely controlled by Chinese investors.
ZDAMWU Secretary General Justice Chinhema said there was a disconnect between massive investment in lithium and labor practices, citing the sector’s lack of job security as ‘almost 90% of the workforce are employed on short, fixed term contracts.’
“We are very worried that these new mines that had come and promised to create jobs are now cutting the jobs in a very short period. We have also heard the same from Prospect Lithium are not renewing contracts that have expired for January and February,” said Chinhema.
“Bikita Minerals has also made similar indications but has not yet made movements, we are closely watching the developments keen to understand the reasons for this and whether it is genuine.”
“If global lithium prices have gone down what happened when the prices were high is it that they were not making up money to cover up for this period? We are trying to get to the bottom of this as workers,” he added.
KMH and Sandawana Mines are closely linked to the ruling ZANU-PF party and military and have a high-grade lithium deposit and total claims covering an area of 3 882 hectares on the Mwenza mountain range.
The lithium firm has completed phase one drilling with a total of 33 764 samples and the total pegmatite at Sandawana is estimated to be circa 600 million tonnes.
KMH operates in three clusters — gold, rare minerals, and energy and owns Freda Rebecca Gold Mine, Shamva Gold Mine, Jena Mines, ZimAlloys, Great Dyke Investments, Sandawana, and Bindura Nickel Corporation.