Saturday, February 16, 2008

‘Mining firms set to finance power project

‘Mining firms set to finance power project

FINANCE and National Planning minister Ng’andu Magande has said some mining firms are ready to provide partial financing for the Kafue Gorge Lower Power project, whose cost has been projected at $1 billion by Zesco. Mr Magande said the offer by the mining companies was a response to current power shortages, which have affected copper and cobalt production on the Copperbelt. Mr Magande said Government had held preliminary discussions with the mines and the World Bank's lending arm, the International Finance Corporation (IFC), which has undertaken a to conduct a feasibility study and has been appointed as adviser.

"So far two of the mining companies have told us they are prepared to invest in energy because they use the energy. We met a few days ago and they told us they are prepared to invest in the Kafue Gorge Lower project," Mr Magande said in an interview on Wednesday.

Mr Magande said Government would meet the mining companies soon after details of the feasibility studies were completed to determine what contribution they would make.

"They want to know the cost and they are very anxious to improve power supply," Mr Magande said, but he did not name the companies.

He said the mining firms wanted to help curb power shortages, which have forced the Copperbelt Energy Company (CEC) to supply the mines with only 60 per cent of the 400 Mega-Watts supplied to the entire mineral-rich Copperbelt Province.

"If this shortage continues, it will be very disruptive to all of them and so they want to help to end it," Mr Magande said.

Zesco senior manager for Marketing and Public Relations, Monica Chisela, said the construction costs had escalated to $1.0 billion from the previous $750 million due to rising costs for equipment and machinery, including other construction costs.

The CEC has previously said it has been importing between 150 MW and 200 MW of power from the Democratic Republic of Congo (DRC) in efforts to plug the deficit.

The copper mines require up to 530 MW in order to meet production demands, and the shortage is expected to worsen when new mining projects are completed this year.

Ms Chisela said Zesco has been rationing power since the start of this year each time demand outstripped supply to keep the industry running and also to curtail a nationwide power blackout.

The entire Southern Africa Development Community (SADC) region is currently facing power shortages, with load shedding being carried in almost the whole region, including South Africa.

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