In November 2016, Copperbelt Energy Corporation Plc’s (CEC) main supplier of power, ZESCO Limited (ZESCO), commenced tariff negotiations with CEC and mine customers to agree an upward adjustment to the applicable tariffs to take effect from 1st January 2017 (the 2017 tariff).
This was seen as a stop-gap measure to help bridge the gap between the increasing cost of providing electricity and the prevailing tariffs to various customer categories while awaiting the results of the cost of service study being spearheaded by the Energy Regulation Board. By the end of quarter two 2017, all of CEC’s customers other than Mopani Copper Mines (MCM) had agreed to the 2017 tariff and started meeting the new bills issued on the basis of the new tariff. ZESCO also implemented the new tariff to CEC and required that CEC meets its payment obligations.
To date, MCM has rejected the industry-wide tariff increment and sought to continue to pay for the electricity they consume at the old tariff. Given that it is already eight months since the new tariff was implemented, outstanding amounts due from MCM have escalated and it has become unsustainable for the utilities (CEC and ZESCO) to continue supplying MCM with their full power requirements.
Under the circumstances, CEC has been left with no option but to restrict power supply to MCM to a level commensurate with the monthly payments that MCM continues to make to CEC. In effecting this restriction beginning 11th August, CEC endeavoured to restrict power only to selected loads on the surface while other surface loads and all underground operations continue to receive their full power requirements. During the restriction process, CEC worked with MCM in ensuring the safety of miners was prioritized.
CEC wishes to highlight that it is saddened by this very unfortunate situation and hopes that the two Managements of CEC and MCM will work together to conclusively resolve this standoff. In this regard, CEC will continue to engage with MCM with a view to finding a negotiated solution within the shortest possible time.
For further information, contact:
Chama S. Nsabika
Senior Manager Corporate Communication
+260 212 244914
+260 966 792922