Annex IV: Wages in Chinese and Other Foreign-Owned Mines in Zambia as of September 2011

In the copper industry, salaries are generally divided between a “basic pay” and a variety of allowances that are standard across the industry. For example, miners receive a “housing allowance” as a percentage of their basic pay: at both the Chinese-owned NFCA and the Indian-owned KCM, miners receive 30 percent of their monthly basic pay. However, since KCM pays its underground miners roughly three to four times the basic pay NFCA does, the housing allowance is likewise more substantial. Other additional monthly payments given to miners include fixed amounts for transport when a miner lives outside the company’s bus system; “shift differentials” for working the night shift; production bonuses; lunch allowances; and, occasionally, education allowances to cover costs for a miner’s child. Not all mining companies provide each of these allowances, but, particularly because of housing allowance disparities, the allowances generally increase the basic pay difference when totaling a miner’s gross pay in a non-Chinese versus Chinese-run mine.

Table 1 below shows the low-, middle-, and high-range basic pay salaries at copper smelting and processing operations in Zambia. As shown, the Chinese companies, CCS and Sino Metals, generally pay one-third to one-sixth the salaries of their competitors from other countries—even for identical work. Thus, an acid-plant operator in CCS’s smelter told Human Rights Watch that his basic pay was 715,008 Kwacha (US$149), whereas an acid-plant operator in KCM’s smelter told Human Rights Watch that he made 3.2 million Kwacha (US$667). Annex V provides a full breakdown of the salaries at Sino Metals and CCS, showing also that the majority of employees fall within the lower end of the pay scale.

Table 1: Pay in Zambian Copper Smelting and Processing Operations as of September 2011 (Chinese Companies in Italics)

Smelting, Processing, and Engineering

Processing and Engineering Only

As seen in the second column of Table 1, companies provided pay increases between 9 and 12 percent for the 2011 collective bargaining agreements. The Chinese companies both provided 12 percent increases, although workers demanded much higher and, at CCS, originally went on strike over the 12 percent proposal.[319]

Table 2 shows salaries at the underground copper mining operations in Zambia, as well as at Lumwana, a surface-only copper mining operation. Although the differences are not as pronounced as in the processing and smelting operations, the Chinese companies are again consistently the lowest payers, with NFCA generally paying about one-half to one-third what underground competitors pay for the same work.

Prior to 2008, the differences in salaries between the main copper mining companies often did not reflect that some companies contracted out substantial portions of their operations to subcontractors that then paid a fraction of the wages for the same work done by permanent employees of the parent company. One report found that in September 2006 almost 40 percent of the copper miners were employed by subcontractors, with wages for some subcontractors only 40 to 50 percent those paid by the main company for the same work.[320] The two largest mining companies, the Indian-owned Konkola Copper Mines and the Swiss/Canadian-owned Mopani Copper Mines, both had sizeable parts of their workforces employed by subcontractors.[321] However, government officials and business representatives told Human Rights Watch that the Ministry of Labor outlined in 2008 that subcontractors had to pay salaries that were at least 80 percent of that paid by the main company to permanent employees, reducing the previous disparity.[322] As a result, while both the Chinese companies and other multinationals still use subcontractors, the wages below reflect salaries achieved through collective bargaining with unions for the employees of the parent mining companies.

Table 2: Basic Pay in Zambian Copper Mining Operations as of September 2011 (Chinese Companies in Italics)

China Luanshya Mine (CLM) is slightly more competitive in its pay than NFCA—particularly for the most skilled workers—but this appears to be a result of the context in which the Chinese investor took over the mine. While, as detailed in the Background, the Chambishi underground mine lay dormant for over a decade before NFCA reopened the mine and started production, Luanshya’s mine was dormant for less than a year. More than a dozen miners at CLM, as well as national union officials, told Human Rights Watch that the Chinese management was forced to essentially carry over the previous conditions of service—including pay—when it started production.[325] Even a high-level Zambian member of management at CLM, who otherwise defended the actions of the Chinese owners there, echoed this explanation as to why CLM paid better than the Chambishi-based operations.[326]