Copperbelt Energy Corporation (CEC) has started restricting power supply to Konkola Copper Mines (KCM) following a commercial dispute between the two companies.
But Minister of Mines, Energy and Water Development Christopher Yaluma said CEC has made a hasty decision, which will impact negatively on the national economy.
KCM public relations and communications manager Shapi Shachinda said in a statement issued in Lusaka yesterday that the restriction of power supply will adversely affect the mine’s operations and further compromise the safety of employees and consequently job security.
According to previous figures released by KCM, the mining company has a workforce of 16,500.
“The operations of the Nchanga integrated business unit have already grossly been affected. KCM regrets that CEC has chosen not to pursue this matter in accordance with the Power Supply Agreement (PSA) provisions on dispute resolution,” Mr Shachinda said.
The dispute follows CEC’s alleged unilateral increase in power tariffs since April this year against the provisions of the PSA between the two companies.
CEC has allegedly been refusing to generate invoices based on electricity tariffs agreed through the PSA to facilitate the payments of bills by KCM for power supplied to the mines.
“It should be noted that prior to April 2014, CEC had increased power tariffs by over 100 percent in accordance with the PSA and this has resulted in KCM having the highest power tariffs in the mining industry in Zambia. KCM now pays more than K700 million per year in power tariffs,” Mr Shachinda said
And Mr Yaluma has said CEC should have found other means of making KCM pay what it owes the power utility.
“KCM is not a domestic consumer. Production will go down with this restriction. CEC should have shown consideration,” Mr Yaluma said
He said CEC should have first exhausted all the channels of negotiations before jumping to the drastic measure of restricting power to KCM, one of the largest producers of copper.