Suite :
Mining companies in Zambia, Africa’s largest copper producer will pay 30% more for electricity consumption following tariff adjustments by the service provider.
The state owned Zambia Electricity Supply Corporation known as Zesco and the power provider to mining companies on the copperbelt agreed to revise tariffs by 30% effective January 1, a measure intended to assist the power company raise funds to upgrade its ageing infrastructure and meet increased demand.
Mr Neil Croucher CEO of Copperbelt Energy Corporation said that tariffs have been upped to meet the dictates and need of the power provider, Zesco that seeks to raise to cost reflective tariffs to mines under the Bulk Power Supply Agreement.
This is the first time since the service provider Zesco and Copperbelt have revised tariffs since 2008 when the duo agreed to raise the remittance by mining companies to enable the company improve its efficiency and supply of power to consumers, chiefly the mines which use 50% of total generation.
Mr Croucher said that the tariffs have been revised by 30% effective from January this year. He declined to give more details on the matter adding that Zesco would issue a comprehensive report soon.
However, sources within the industry stated that constant supply of power to the mining companies and avoid interruption of production was one of the conditions that obliged the companies to agree to the cost reflective tariffs as demanded by the service provider Zesco.
The mining companies further demanded that the 30% rate agreed upon was incumbent upon the US Dollar being the standard determinant of what the mines needed to pay. The mines agreed on the basis that Zesco should not review tariffs unilaterally unless the value of the US Dollar at any one given time was used as barometer to warrant further increase.
Zambia generates 1,400 MW to meet industrial and domestic consumers and increases to 1,800 MW at peak period not enough to meet the increased demand for power, spurred by ongoing investments in mining, agriculture and other sectors.
The power company seeks to more than treble power generation in the Southern African nation and lures more investments in various sectors other than mining and help the country grow its economy let alone make the country a middle income nation before the year 2030 under various government initiated national development programs.
According to international ratings, the resilience by Zesco to boost power output and make the country energy efficient, despite the low rates among other competing Southern African countries Zambia has been widely admired among other African countries. It has since been dubbed one of Africa’s favorite destinations and a safe haven to do business.
Mining companies, among others, Konkola Copper Mines, Mopani Copper Mines and China run Non Ferrous Africa Corporation have been instrumental in improving Zambia’s copper output and supply to the international metal market. This resulted in copper output rising to 900,000 tonnes per annum this year from about 650,000 per year earlier.
According to the Lusaka based Bank of Zambia report, output of the metal surged 15% in the Q1 this year to 204,597 tonnes from 196,466 tonnes a year earlier. Exports of the metal rose significantly, reaching 200,037 tonnes from 198,247 tonnes during the similar period.
Cobalt output increased 10% to 2,236 tonnes from 1,989 tonnes last year and exports increased to 2,279 from 1,977 in spite of the wet whether conditions at most mines including open pits which increased operational costs at most units.
Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
Ven 13 Mai 2011 09:46 