The shareholders of Copperbelt Energy Corporation Plc (“CEC”) are referred to the announcement dated 27th September 2019 in which the Company advised of the action taken by ZESCO Limited (“ZESCO”) against CEC pursuant to the Bulk Supply Agreement (the “BSA” or “Agreement”) and the UNCITRAL Arbitration Rules surrounding the following matters:
- ZESCO’s claim that CEC has not fully paid money due to them for electricity supplied under the BSA. The principal claim relates to the tariff discussion of 2011 in relation to Konkola Copper Mines Plc (“KCM”) and the impact of Statutory Instrument No. 33 of 2012, which outlawed charging and/or paying in any currency other than the Zambian Kwacha. Shareholders may be aware, from previous cautionary announcements, that there are also other amounts outstanding which relate to the supply of power by CEC to KCM, which continue to remain unpaid by KCM;
- ZESCO’s disagreement with a statement in CEC’s 2018 annual report relating to the contingent liability arising from the 2014 Energy Regulation Board (“ERB”) electricity tariff increase specific to mining companies, which the mining companies have legally contested and were granted a stay pending determination of the matter in the High Court for Zambia.
The arbitral proceedings (which are confidential between the parties in accordance with paragraph 26 (i) of the Agreement) have concluded. Accordingly, the Board of Directors of CEC wishes to inform shareholders that following the said proceedings the sole arbitrator, on 21st July 2021, issued an Interim/Partial Award determining some aspects of the dispute between the parties. The quantum of the liability and related interest in (1) above as well as the contingent liability referenced in (2) have been reserved for the Final Award.
The Board will keep shareholders informed regarding this important matter as events unfold.
Shareholders are, therefore, advised to exercise caution in dealing in the Company’s securities until further notice.
By Order of the Board
Julia C Z Chaila
Issued in Lusaka, Zambia on 07 September 2021
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First Issued on 27 September 2019