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Vimetco cuts 60% off workers’ salary

Basudeb Datta -General Manager Vimetco

By Diana Coker

In the Moyamba District, in the south of Sierra Leone, the Sierra Mineral Holding Ltd (Vimetco) Bauxite Mining Company has laid off 73 of their approximately 1,000 staff. The staff range from junior to senior employees and will spend months at home, receiving 40% of their basic salary.

The global pandemic of COVID-19 struck Sierra Leone at the end of March 2020. In early April, the Government instituted several harsh restrictions and declarations to prevent the further spread of the disease. These restrictions and the economic downturn have severely affected miners and employees of some of the largest mining companies in Sierra Leone. In Moyamba, employees of Vimetco were told to “go home” and wait indefinitely.

The Human Resources Manager of Vimetco, Alusine Conteh, confirmed the company has sent 73 of their workers home on what he referred to as, “garden leave,” because the COVID-19 pandemic has severely affected their business. However, he noted, “In other countries, during situations of this nature, companies will terminate the contract of their employees. We have not terminated the contracts of any worker, as we will need them when the pandemic is over.”

He noted they normally do four shipments of bauxite every month, but because of COVID-19 restrictions, shipments have dropped drastically. In April 2020, last month, they shipped only one shipment because many companies are not allowing their workers to leave their respective countries to collect cargo in Sierra Leone.

Vimetco Holdings is one of the largest aluminium producers in the world and has been supplying raw bauxite to the global market since 2010. Sierra Mineral Holdings 1 Limited holds a mining lease of 321.7 square kilometres that lies along the same belt with the Guinea bauxite deposit. Sierra Mineral Holdings Limited (SMHL), a subsidiary of Vimetco, took over all the bauxite operations in this belt and were granted a mining lease valid till 2032. Between 2018 and 2020, they produced 2.2 million tons of commercial bauxite per year at a rate of approximately 8,000 tons per day.

Conteh said, “There is a financial burden on the company at this time, because we are producing and not selling. We engaged the United Mine Workers Union,” the Union that oversees miners who work for Vimetco. Conteh continued, “We informed them that because we are not shipping, we can no longer bear the cost of paying each employee their transportation, food allowances and other incentives, as we do during normal times.” He added, “We presented a list of essential and non-essential staff to the Union. And, we signed an agreement that the staff affected will not be terminated.” He explained that each affected employee will continue to benefit from medical care and receive a bag of rice every month of their layoff.

The General Secretary of the United Mines Workers Union (UMU), Ezekiel Dyke, firmly associated with the stance of the company, saying it is better to adjust the salaries of the affected workers than lay them off.

 

Responding to allegations that no foreign staff has been affected, Conteh said, “Four of our expatriate staff, who were on leave at the time, were told not to return to the country until the situation normalizes.”

Conteh stressed the reduction of staff is tied to restrictions on social/physical distancing. He said, considering the size of the company, they did not want their employees to crowd together. He added, “The transportation buses we use to convey employees to and from work posed a significant risk, even when we insisted on facemasks and hand washing.”

The Government of Sierra Leone has dictated facemasks as mandatory for everyone, including miners. Vimetco has provided facemasks for workers and their dependents. He said the buses now only carry 20 passengers on a 40-seater bus. Conteh noted, “With our reduced staff, no other employee will be given a leave.” Interestingly, in the face of layoffs and cutbacks, Vimetco donated Le100 million (approximately $10,000 USD) to the Moyamba District Emergency Operations Centre.

According to the Chair of the Network Movement for Justice and Development (NMJD), a civil society mining advocacy group, Sylvester Bob Carter, the Vimetco scheme came into effect in April 2020 and will hopefully end in June 2020. He said the Vimetco’s management claims to have experienced a drastic drop in sales of bauxite as a direct result of the COVID-19 prevailing pandemic. Carter went on, the company has been greatly affected in order to comply with World Health Organization (WHO) health preventive protocols. For example, “Ships are no longer coming from other countries,” he added. “Vimetco cannot ship and sell, which means they make no money, for now.”

 

Some of the Vimetco workers affected by the COVID-19 lay off and salary adjustment scheme said they were not satisfied with the how the Company was handling the situation. The workers wanted anonymity, for fear they would be terminated if they spoke out. One worker said, “The Company could have laid-off staff or cut salaries on a rotational basis, instead of targeting a specific group. One group for one month and then another group.”

Economic growth in Sub-Saharan Africa has been significantly impacted by the ongoing coronavirus outbreak. Growth is forecast to fall sharply from 2.4% in 2019 to -5.1% in 2020. This will be the first recession in the region for over 25-years, according to the World Bank.

And, according to the IMF, one of the major challenges if the crisis persists is the loss of employment as companies lay off staff. This ripple impact of this is hugely significant, as loss of employment will mean loss of income, reduction in aggregate demand and lost livelihoods for households. This will result in more and more people in Africa descending into abject poverty and possibly increases in civil unrest, crime and internal conflict.

 

This story was a collaboration with the Media and Information Bureau in Sierra Leone and New Narratives as part of the Excellence in Extractives Reporting Project. German Development Cooperation provided funding. The Funder had no say in the story’s content.

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