Maravi

DPI recommends end to mines energy subsidies

DPI recommends end to mines energy subsidies
By Florence Bupe
Thursday December 13, 2007 [03:00]

THE government needs to discontinue energy subsidies to the mines and use the revenue for the expansion of the sector, Development Partnership International (DPI) Zambia has recommended. And energy permanent secretary Peter Mumba has admitted that at the time the energy subsidies for the mines were being decided on, the government was desperate to bring in foreign mining investment.

DPI Zambia media and strategy coordinator Richard Musauka said the current energy subsidies granted to the mines could have gone towards the empowerment of rural communities through increased electrification.

“The policies government puts in place should be of benefit to both the local people as well as the private foreign investors,” Musauka said. “It must be noted with shame that a country with vast water resources cannot provide electricity to the majority of its citizens.”
Musauka advised the government to listen to the appeals by various sectors of society to scrap off the energy subsidies to the mines as a way of increasing access to electricity, especially for the rural communities.

“It is advised that the government should cancel the energy subsidies given to rich investors at the expense of poor rural communities. Would it be okay, for example, for a family man to buy a bag of mealie meal for his friends when his own children are in starvation?” he asked.

Musauka further said the continued energy subsidies to the mines were negatively impacting on Zambia’s efforts to environmental sustainability.

“The energy subsidies Zesco has given to the mines are contributing to deforestation in the country and this will in the near future affect Zambia’s preparatory efforts to ensuring environmental sustainability,” Musauka said. “The huge volumes of charcoal being consumed in Zambia are going to make it difficult for the country to survive the calamities coming with global warming.”

But Mumba said that the government was not relaxed about reviewing energy tariffs for the mines in a bid to improve the living standards of millions of its citizens.

“The tariffs the mines are paying are being reviewed, just like we are reviewing the development agreements,” Mumba explained. “At the time energy tariffs for the mines were being negotiated, we were in a hurry to attract investors into the sector. I’m sure you will recall that Anglo-America pulled out at a very critical stage, and government had to find a way of pulling investors.”

He said the government was already in the process of reviewing energy tariffs for the mines, and expected that new tariffs would be effected early next year.

“I agree that it is only proper and correct that energy tariffs for mining houses are reviewed as soon as possible. However, the first step is to negotiate with CEC (Copperbelt Energy Corporation) as the major supplier to the mines, who in turn are expected to renegotiate directly with the big mining houses,” he said.

And Mumba disclosed that the country would be adequately covered in terms of fuel availability during the festive season.

“There is completely no need for motorists to worry as we have more than enough fuel, we don’t know what to do with it. We are expecting 90,000 metric tonnes of feedstock to dock in Dar-es-Salaam on December 14 (Friday) and this consignment will last until the end of February next year. By then, we will be ready to engage the supplier under the long term procurement strategy,” said Mumba.

Labels: DPI, ENERGY, MINING

posted by MrK @ 4:45 AM