Message Mer 4 Mai 2011 00:28

Mining firms to pay more for power

Mining firms to pay more for power
Wednesday, May 4, 2011

MNING companies may soon start paying pay more for electricity when key power providers finalise negotiations in due course.

Eectricity tariffs for the mining companies were last reviewed in 2008 when Copperbelt Energy Corporation(CEC) and Zesco Limited agreed to raise power by 35 percent to meet energy costs.

Mr Neil Croucher chief executive officer of CEC said that negotiations have stepped up to review the energy tariffs to cost reflective levels to ensure the sustainability of the copper and mining industry.

Several issues relating to the review have been discussed by CEC and Zesco who are likely to finalise negotiations by early this month.

Mr Croucher said “we have discussed and looked at various areas that will make the use and production of electricity profitable for both of us. We should finalise next week or early May.”

In 2008 Zesco and CEC resolved to review the cost of providing power to the mines to rise to 35 percent, with pledges from the power utility to ensure reliable supply of power to the mines.

Last year, Zesco reviewed industrial and domestic tariffs by between 25 percent and 41 percent arguing that there was need for the company to move to cost reflective tariffs to ensure more investment was put into the energy sector and meet the increasing demand for power.

Zambia produces 1,400 megawatts of power but demand rises to 1,800 MW at peak periods which means supply is not enough to meet the increased demand from the mining industry and domestic consumers.

The chamber of mines, commenting on the looming tariff review, said it expected current high international metal prices to absorb rising operational costs worsened by the surging energy costs.

Mr Frederick Bantubonse general manager of chamber of mines noted that the impending surge in energy would not impact on the planed 900,000 tonnes of copper expected to be produced this year. – STEELGURU.