Maravi

CEC chief urges quick tariff review for mines

CEC chief urges quick tariff review for mines
By Kabanda Chulu
Monday January 14, 2008 [03:00]

Copperbelt Energy Corporation (CEC) chairman Hanson Sindowe has said there is need to urgently complete negotiations with the mining companies with a view to increasing electricity tariffs. Last month, domestic power charges were increased by 27 per cent by Zesco Limited, but Sindowe declined to say how much the tariffs would rise for the copper and cobalt mining companies.

“Negotiations of the electricity tariffs with mining companies is an urgent matter that required thorough analysis and understanding especially that power supply is a key feature of development in the country and renegotiations are very complex and challenging in that the tariffs should be set at appropriate levels whereby they should not be too low or too high in order to attain the balance needed among the parties involved," Sindowe said.

"Currently, CEC is meeting representatives from the mining firms with a view to revise the tariffs upwards, but the challenge is that some mines are still waiting for approval from the company's boards and on our part we have to renegotiate on two fronts; Firstly with Zesco and secondly with the mines."

The mining companies pay lower rates compared to most industries after they negotiated lower tariffs at the time Zambia was privatising its copper mines in a bid to keep them running.

Nevertheless, Sindowe said the tariff rise negotiations were almost concluded with various foreign mining firms.

"We are currently negotiating with the mines and we are almost there, especially that we have agreed on the approach,” he said.

Sindowe explained that the power tariff increase by Zesco was a positive development because the company needed to become economically viable in order to ensure that Zambia reaped greater benefits from profits that foreign mining firms were reaping from higher global metal prices.

Since 1997, Copperbelt Energy has a Bulk Supply Agreement (BSA) with Zesco that is effective until 2020. This agreement entails CEC to buy electricity for onward transmission to its customers, which are mainly the mining companies.

CEC was formerly a Power Division under the defunct state mining conglomerate, Zambia Consolidated Copper Mines (ZCCM), and was established to ensure reliable and available supply to the mines.

Labels: BULK SUPPLY AGREEMENT, CEC, ENERGY, HANSON SINDOWE, MINING

posted by MrK @ 3:39 AM