Equinox Minerals agrees to pay Zesco US$4m
By Kabanda Chulu and Mutale Kapekele
Wed 24 Mar. 2010, 04:00 CAT [218 Reads, 0 Comment(s)] Text size Print
EQUINOX Minerals has agreed to pay US$4 million and not the US $9 million claimed by Zesco Limited as total electricity charges for the power supply incurred during the construction of the Lumwana Copper Mines in North Western Zambia.
In January 2009, Equinox Minerals, which is the holding company of Lumwana Copper Mines, had a dispute with Zesco over electricity charges believed by the Zambian utility company to have been incurred by Lumwana between 2008 and 2009.
Initially, Zesco had claimed invoice values totalling US $9 million for the period up to December 31, 2008. However, based on legal advice, Equinox Minerals determined a value of US $2 million as payable based on the terms of the contract.
Therefore, Equinox Minerals disputed the Zesco claim and only paid US $2 million but Zesco filed a notice of termination of the agreement to supply power, which resulted in Equinox Minerals to seek arbitration in the Lusaka High Court.
However, the High Court declined to make a ruling and advised the two parties to enter into negotiations in an effort to reach a settlement and resolve the matter in a reasonable manner.
According to the terms of the US $4 million settlement agreement, Equinox Minerals would have full and final satisfaction and release from all claims and causes relating to the dispute that involved Zesco's power off-take supplied to the Lumwana Copper mines up to and including December 2009.
And in a joint statement released on Monday after signing the settlement agreement, Equinox Minerals president Craig Williams and Zesco Limited acting managing director Ernest Mupwaya stated that:
“We are very pleased that the dispute has been resolved in an amicable manner and we reiterate that this Settlement Agreement underscores our strong commitment to develop and grow a long-term relationship and partnership.”
Lumwana is the first 'green fields' copper investment in Zambia in recent years and has brought significant infrastructure development and employment to what was an economically depressed area of Zambia.