Message Mar 29 Mar 2016 11:28

‘Tariffs affect production’

VEDANTA Resources-owned Konkola Copper Mines (KCM) has no immediate plans of restarting operations at its Nchanga underground mine that was placed on care and maintenance last November due to low copper price.
And KCM says high power tariffs have increased the cost of production by US$5 million per month.
KCM vice-president for local economic development David Paterson said the company will consider resuming operations at the underground mine when the price of copper improves on the international market.
Mr Paterson described the slight increase in the global price that has broken the US$5,000 per tonne mark, as insignificant to warrant resumption of operations.
“It is our intention to restart operations at Nchanga underground but we want to see a situation where the price continues to rise and stabilise, and be above the cost of production. We are not yet there so I can’t tell you the exact date when operations will resume,” he said in an interview recently.
When asked what could be the ideal price to be above the cost of production, Mr Paterson said there is need for a good price to result in viable mining operations.
“We need a good price to enable the mines undertake operations without incurring losses, but since we don’t control prices, we will focus on improving performance by reducing costs and keeping eyes open for opportunities at existing businesses and new ones because we are in business to make a profit,” he said.
On the impact at the smelter since the plant shutdown, Mr Paterson said the effect has been minimal.
“We are able to get materials from other sources such as the open pits and the refractory ores,” he said.
And Mr Paterson described the increase in electricity tariffs as one of the biggest challenges the company is facing.
“The cost of production has increased by US$5 million per month due to the rise in power tariffs. We are looking at options of starting power generation in Zambia. We are doing that with one of our subsidiaries in India,” he said.