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(MINEWEB, REUTERS) Zambia starts negotiating higher electricity prices with foreign miners

Zambia starts negotiating higher electricity prices with foreign miners
Zambia's energy minister says, higher prices for electricity are in the mines' interest as well, because without new generation facilities there will not be enough power
Posted: Monday , 20 Sep 2010

LUSAKA (Reuters) -

Zambia, Africa's largest copper producer, has started negotiating higher electricity prices with foreign mining companies, the minister of energy said on Saturday.

Energy minister Kenneth Konga told a news conference state power utility Zesco Ltd was currently in talks with miners over higher prices, but declined to say by how much.

"It is in the interest of the mines as well that the cost of power goes up because there will be no electricity if the country does not invest in new generation facilities," he said.

Zambia has said it plans to raise electricity prices to cost-reflective levels by 2013 to help fund investment in new power generation facilities.

[Question: obviously they are not 'cost reflective' now. Why not? This is just another way the foreign owned mining companies are fleecing the country. - MrK]

Foreign mining companies operating in Zambia include Toronto-listed First Quantum Minerals (FM.TO: Quote) and Equinox Minerals (EQN.TO: Quote) (EQN.AX: Quote), London-listed Vedanta Resources Plc (VED.L: Quote), Glencore International AG of Switzerland [GLEN.UL] and South Africa's Metorex (MTXJ.J: Quote).

Copperbelt Energy Corp. (CEC), the main supplier of power to the mines, has an agreement with Zesco that provides for yearly tariff hikes to cover inflation.

A CEC official said in July that companies operating older mines may be forced to shut down some of their operations if Zesco raises the tariffs beyond the hike to cover inflation. (Reporting By Chris Mfula; editing by David Dolan)

Labels: CORRUPTION, ENERGY, ZESCO

posted by MrK @ 6:48 PM