Kenya has largely escaped the prolonged fall in global commodity prices because of its mineral-light economy and instead managed to grow its exports for the first time in five years, but more than 100 workers at a fluorspar factory in Kerio Valley are an exception.
Kenya Fluorspar Limited has been struggling to keep its grinders running for the past three years since global commodity prices started to retreat due to weaknesses in the economies of major importers such as China, but the last six months have been too hard to survive.
The company's management, which dismissed 195 people last year, now says more employees will be terminated as the plant halts operations for the second time effective April 30.
TERMINATION OF EMPLOYMENT
“Today’s announcement will unfortunately result in termination of employment of employees across all levels of staff. All agreements will be respected and wages and dues paid in full,” said Nico Spangenberg, Fluorspar Kenya’s managing director and chief executive officer.
The company remains non-committal on when operations are likely to resume but says the current employees will receive preference in re-employment.
The mining firm had cut its annual production by 19 per cent to 77,000 metric tons from an earlier evaluation of 95,000 tons. Fluorspar is used in making steel, aluminium and refrigerant gases.
It says the steep depreciation in the value of the mineral over the last six months has rendered operations unsustainable in the current market conditions.
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According to the latest commodity price outlook report from the World Bank, global commodity prices are expected to sink lower this year due to reduced demand and oversupply.
The commodity prices slump has inflicted heavy damages on economies such as Nigeria, South Africa, Brazil and Zambia whose export earnings have fallen dramatically leaving them with budget holes and inflation as currencies collapse. India and China are the world's major producers of fluorspar.