Maravi

ERB to hike tariffs for mines

ERB to hike tariffs for mines
By Gift Chanda in Lusaka and Darious Kapembwa in Kitwe
Fri 22 June 2012, 13:25 CAT

THE Energy Regulation Board plans to gradually hike electricity tariffs for mining firms to achieve cost reflectivity by 2015. ERB director for infrastructure and regulation, James Manda, said the energy regulator would like all mining companies by 2015 to be paying electricity tariffs that reflect the true cost of producing power.

He told the mining and energy conference in Lusaka on Wednesday that the ERB would gradually raise the electricity tariffs in the mining sector to cost reflectivity by 2015.

"We want to see this migration by 2015," Manda said.

And energy minister Christopher Yaluma said the country was far from achieving electricity tariffs that reflect the true cost of producing power.

"From where we are, we are not even close to what we would like to see from the initial stage and that is why we are saying the next tariffs we are going to approve will start having that element of cost reflectivity in them," Yaluma told journalists on the sidelines of the conference.

"That is what is going to sustain or woo investors to go in hydro power generation because that cost of doing maintenance works will be embedded in the tariffs. As it is, power producers have got to strive to do their maintenance because the power is given without taking into consideration that cost element which would maintain the equipment."

Yaluma said sustainable development could only be achieved with adequate energy generation and supply.

He noted that currently the level of power generation in Zambia was inadequate to meet the demand of the mining industry.

He urged the private sector to work with the government and invest in the country's energy sector to address the current energy shortfall.

Electricity is a major issue in Zambia as the mining sector in Africa's top copper producer is power hungry and growth over the next few years could be constrained by available supply.

The power shortfall in the country has triggered widespread blackout and forced the country's power utility, Zesco, to be rationing power.

Zambia, however, expects to have a power surplus of about 600 megawatts (MW) by 2016, which should help ease the electricity deficit facing southern Africa.

Meanwhile, a mining consultant has proposed that the government and mining companies build two dams in Copperbelt and North Western provinces for hydro power generation.

Makesa Kalifungwa, who is also proprietor of Goldenberg Mining in North Western Province, suggested that all mining companies should accept to go into partnerships with Zesco and the government to build sustainable power sources in the country that would ultimately reduce load-shedding as well as the cost of doing business.

"This will also reduce the cost of electricity. Such ventures will have multiple effects in that fish farming will be enhanced and the manufacturing sector will be boosted because power will be cheaper," Kalifungwa said.

He said mining companies being the biggest power consumers should have no problems venturing into such projects and cited Copperbelt Energy Corporation as having embarked on power projects.

Kalifungwa also urged the government to intensify oil explorations in parts of the country that had been long earmarked for such activities.

"Feasibility studies have been done before and these studies have revealed that there is oil in notable areas in the country, so the best is to allocate adequate resources in the budget to go towards exploration of oil," he said.

Labels: ENERGY, ERB, MINING

posted by MrK @ 2:49 PM