Ven 13 Avr 2012 16:47
Electricité
Zambia's government has asked KCM and the country's utility, Zambia Electricity Supply Corp., known as ZESCO, to find ways to lower costs incurred during production of copper at the country's second largest producer, in order to ensure sustainability for a key project in Africa's top producer of the red metal.
This follows a complaint from the miner at the rising costs of electricity used to pump out water from its underground operations at its Chililabombwe unit, located in Zambia's Copperbelt; an issue it said was affecting its investment plans. The KCM spokeswoman couldn't immediately be reached for comment.
KCM, a unit of London Listed Vedanta Resources PLC (VED.LN), says about 50% of the costs at the Konkola Deep Mining Project are spent on pumping out water from the mine, which is the world's wettest.
Copperbelt Energy Corp., or CEC, provider of power to mines, said the law in Zambia doesn't allow consumers to pay in installments, and mining companies are obliged to meet full costs under the Bulk Power Supply Agreement.
CEC buys an average 540 megawatts of power each day from ZESCO, which it then sells to mining companies. ZESCO's managing director, Cyprian Chitundu, Friday referred queries to CEC.
During a recent tour of KCM's operations, Mines Minister Christopher Yaluma made it clear the Zambian government isn't obliged to give concessions on its incurred costs, although he called KCM a key project and suggested that ZESCO and KCM could agree on offsetting electricity bills in installments.
Mining in Zambia has for many years provided 75% of the country's revenue through exports, primarily of copper.
KCM's chief executive officer, Jeyakumar Janakaraj, said the company's high spending on power was one of the major factors raising the cost of production, although he didn't disclose at what level those costs were.
Konkola, with an investment of $2.5 billion at its inception in 2004, has started various expansion projects including deepening Konkola Deep Mine Project. That is expected to open next year and to increase Zambia's copper output to 400,000 metric tons a year, from approximately 240,000 tons presently.
KCM has a labor force of more than 12,000 workers, and has operations in Chililabombwe, Chingola, Kitwe and Nampundwe where it operates a pyrite mine.
-By Geoffrey Sinkamba, contributing to Dow Jones Newswires; jeff.kapembwa@gmail.com
(END) Dow Jones Newswires