Thursday, March 28, 2024

Chambers of Mines cries foul over 28.8% electricity tariff hike

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The Chamber of Mines of Zambia has expressed concern on the announcement by the Energy Regulation Board (ERB) to increase electricity tariffs for mining companies under the Bulk Supply Agreement by 28.8 per cent, effective 2nd April 2014.

The Energy Regulation Board (ERB) has authorized state-power utility ZESCO to increase power tariffs for all mining companies in the country by 28.8 per cent.

Chambers of Mines of Zambia Chief Executive Officer, Maureen Dlamini, says while the mines understand the need for utilities to earn a fair return on their investment to be able to efficiently and sustainably operate and maintain the infrastructure, cognizance must be taken of the long term nature of the mining business.

Ms. Dlamini says due to the long term nature of mining investments, corresponding long term planning from a policy and regulatory perspective is necessary to attract and retain investment in this sector.

She points out that power supply to mining companies is governed by commercial contracts entered into mutually by ZESCO and respective companies taking into account the full commercial circumstances prevailing at the time of entering into such contracts, and anticipated to occur over the life of the contract.

Ms Dlamini adds that the mining sector agreed to extra ordinary tariff increases of 35 per cent in 2008 and 30 per cent in 2011 outside existing contracts on the understanding that investments would be made to improve the quality of power being supplied to the industry.

She notes that with the falling of commodity prices on the global market which has been forecasted to remain low over the medium term against the rapid increase in production costs, the mining customers are asking for a robust, transparent and long term tariff migration path.

Ms Dlamini says this would help the mining companies to adequately plan for their critical inputs.

She states that the statement from the ERB is notably vague on how it expects the parties to these contracts to implement its ruling, which has once again been made in total disregard of the of the existence of commercial contracts, and without any prior formal communication to the affected parties in the mining sector.

Ms Dlamini appeals to the Energy Regulation Board to review its decision to increase tariffs for the mining sector as this will exert excessive pressure on the mining companies.

This is contained in a statement made available to QFM News by Chambers of Mines of Zambia Communications Manager, Talent Ng’andwe.

5 COMMENTS

  1. Phone companies make easy money and no one complains. Their infrastructure is easy to run once installed because it is mostly static. The infrastructure for a power utility is more expensive and difficulty to run. Wires have to run from a generating station right up to the consumer, be it a home in kalingalinga or a mine in solwezi. Electrical energy is more important than phones but in Zambia things are upside down. An average home spends more on talk time than electricity per month and every member of the family has a cell phone.

    • The mines can easily absorb that cost.

      I hope ZESCO will in turn reduce the tariffs on commercial and particularly domestic consumers as a way of providing affordable energy and consequently reduce poverty among the people.

      Besides there is so much fraud and tricks in these mines, evading and avoiding paying taxes and ploughing little to nothing back into the mining communities.

      By reducing energy tariffs on domestic consumers, Zambians will indirectly be benefiting from the mines

  2. ONE OF THE STRANGEST SETUPS IN OUR COUNTRY WAS THE SETTING UP OF THE COPPERBELT ENERGY CORPORATION (CEC) AT PRIVATIZATION OF ZCCM THROUGH SOME DUBIOUS MANAGEMENT BUY OUT.
    CEC SUPPLIES POWER FROM ZESCO TO THE MINES, AT A COST, INSTEAD OF ZESCO SUPPLYINF DIRECTLY TO THE MINES. RIGHT NOW CEC IS BENEFITTING MASSIVELY TO A FEW INDIVIDUALS WHO OWN IT. LET’S CUT THE NONSENSE IMMEDIATELY. BUT ZESCO MUST BE CLEANED UP BECAUSE RIGHT NOW IT IS A CASH COW FOR RULING PARTIES IN ZAMBIA. MAY BE THAT IS ONE OF THE REASONS WE NEED A NEW CONSTITUTION TO STOP THE ROT.
    YES, SOMEONE WILL SAY CEC IS A SUCCESSOR OF THE FORMER ZCCM POWER COMPANY BUT THAT ARRANGEMENT HAD TO STOP.

    • CEC are like kaponyas, they buy power from ZESCO and re-sale at a higher price to the mines. By now they should have been generating their own power.

  3. Please ERB don’t mind the Chamber of Mines the represent the intetest of their greedy members….have they ever wondered who subsidies their tarriffs when they are enjoying their profits in tax havens.

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