Miners to see Zambian power prices rise -official

LUSAKA, April 20 (Reuters) – Zambia expects to agree on higher electricity prices with mining companies this year in a move that is likely to increase costs in Africa’s top copper producer, a senior industry official said on Wednesday.

Neil Croucher, managing director for operations at Copperbelt Energy Corp (CEC), the main supplier of power to the southern African country’s mines, told Reuters that negotiations for higher power prices, which started last year, were nearing conclusion.

Croucher said state-owned Zesco Ltd, which generates almost all the electricity CEC supplies to mines, last year requested that power prices be renegotiated and that CEC also started parallel negotiations with the mining companies.

“These two processes are running concurrently, and we are now looking at the possibility of concluding and implementing the new charges long before the end of this year,” Croucher said.

The increases would affect London-listed Vedanta Resources Plc, Glencore International AG of Switzerland, South Africa’s Metorex and Brazil’s Vale, Croucher said.

He declined to state the percentage prices would be hiked.

Zambia’s copper and cobalt output is expected to rise steadily as smelters and mines re-start production, after cutting back or halting operations due to the global financial crisis, and move to full output, the CEC official said.

Croucher said the opening of new mines and expansion of existing projects would also boost power demand.

“Investment in the power sector remains critical as power availability will emerge as one of the key constraints for future growth and development in Zambia,” Croucher said. (Editing by Jon Herskovitz and Jane Baird)

Source: Futurespros.com