Supplying reliable power to Zambia’s copper mines

The Copperbelt Energy Corporation (CEC) supplies highly secure and reliable electricity to the mining sector in Zambia, the cornerstone of the country’s economy. CEC was formed in 1997 after the privatisation of government owned and controlled Zambia Consolidated Copper Mines (ZCCM). After initial investment from the United Kingdom’s National Grid and Cinergy of the United States, the Zambian Energy Corporation (Zam-En) bought a majority stake in 2006 and promised to list the company on the Lusaka Stock Exchange (LuSE). In 2007, 25 percent of CEC was sold to the public and employees and in January 2008, CEC shares were listed on the LuSE and the company began trading. Of the shares sold, five per cent were offered to staff in a share ownership scheme.

CEC is split into two divisions. The first, based in Kitwe, is primarily concerned with operations, predominantly mining; and the second deals with corporate development for other areas of the business such as its fibre optic telecommunications network and new business development. The corporate development division is based at CEC’s corporate head office in Lusaka.

Understanding the customer

Managing Director for Operations Neil Croucher has been with the company six years, but has a wealth of power utility experience behind him. He believes that CEC is fully committed to providing secure and reliable power to the mining community.

Croucher says: “We recognise the needs of our customer and nothing will ever compromise that. We have customers we understand well and a lot of our employees used to work in the mining sector. They understand the need for high quality, reliable power.”

Technology

CEC recognises the importance of technology, especially when it comes to delivering its key objectives of providing secure power and improving service delivery.

“The need for ever increasing quality is very evident,” says Croucher. “We have developed a number of key performance indicators and are constantly looking to improve techniques and equipment.”

“Circuit breakers, protection equipment like micro-processor based relays and new metres improve performance. The metres can be accessed remotely from our central control system, improving efficiency and response time.”

“We have also integrated software packages for our entire business, including procurement, inventory control, accounts, payroll, and human resources,” says Croucher.

Investments

Alongside ongoing refurbishments at the business, which total around US$10 million per year, CEC is also expanding into other areas with an emphasis on environmentally friendly and renewable energy.

According to Croucher: “The most advanced project is the Kabompo Gorge hydro power station. “We are hoping to reach financial close on the project this year with construction expected to start in 2012. Most of Zambia’s power generation is from hydro – around 99 percent – so it has a very good environmental footprint. We established a small unit to pursue renewable energy and we are making good progress.”

“We have also invested in electricity infrastructure totalling US$40 million at the Konkola Copper Mine and, last year, also spent a further US$3 million on expanding our fibre optic network.”

Corporate responsibility

CEC is fully aware of its corporate responsibility with regards to employee safety, community welfare and social support.

“Safety, health and the environment are fully integrated in the business and it is the first thing we report on at management meetings. We have a department that monitors performance and implements safety processes,” states Croucher.

“HIV and AIDS are a serious problem in Zambia. So we have campaigns and partnerships to try and tackle this. We provide free antiretroviral medication for staff, their spouses and smallest children. Malaria is also an issue. We annually spray employees’ homes, other areas and breeding grounds on the Copperbelt in association with other companies and the Ministry of Health,”

“We fund a number of health and educational activities and, in this regard, have refurbished facilities at hospitals and upgraded classrooms at the University of Zambia’s School of Electrical and Electronics Engineering. CEC also owns and sponsors a Zambian Premier League team called Power Dynamos Football Club,” says Croucher.

Looking forward

Despite the mining industry being hit hard by the recession, CEC is confident that the business is set to grow substantially in the coming years, not only in supplying power to copper mines, but also by expanding its fibre optic network and power generation divisions.

“The financial collapse had a significant impact on the business with a 25 percent drop in demand for power. We scrutinised the business and cut costs in order to remain profitable, but did not compromise the quality of our supply,” reveals Croucher.

“With the rising price of copper, we see huge potential for growth. Our core business will still be supplying the copper mines, but we hope this will increase by 50-100 percent.”

“We also want to diversify the business in telecoms, power generation and possibly transmission. We will look at opportunities across Africa and hopefully establish some solid partnerships and joint ventures along the way,” says Croucher.