Copperbelt Energy Corporation (CEC) has started restricting power supply to Konkola Copper Mines (KCM) following a commercial dispute between the two companies.
But Minister of Mines, Energy and Water Development Christopher Yaluma said CEC has made a hasty decision, which will impact negatively on the national economy.
KCM public relations and communications manager Shapi Shachinda said in a statement issued in Lusaka yesterday that the restriction of power supply will adversely affect the mine’s operations and further compromise the safety of employees and consequently job security.
According to previous figures released by KCM, the mining company has a workforce of 16,500.
“The operations of the Nchanga integrated business unit have already grossly been affected.
KCM regrets that CEC has chosen not to pursue this matter in accordance with the Power Supply Agreement (PSA) provisions on dispute resolution,” Mr Shachinda said.
The dispute follows CEC’s alleged unilateral increase in power tariffs since April this year against the provisions of the PSA between the two companies.
CEC has allegedly been refusing to generate invoices based on electricity tariffs agreed through the PSA to facilitate the payments of bills by KCM for power supplied to the mines.
“It should be noted that prior to April 2014, CEC had increased power tariffs by over 100 percent in accordance with the PSA and this has resulted in KCM having the highest power tariffs in the mining industry in Zambia. KCM now pays more than K700 million per year in power tariffs,” Mr Shachinda said
And Mr Yaluma has said CEC should have found other means of making KCM pay what it owes the power utility.
“KCM is not a domestic consumer. Production will go down with this restriction. CEC should have shown consideration,” Mr Yaluma said
He said CEC should have first exhausted all the channels of negotiations before jumping to the drastic measure of restricting power to KCM, one of the largest producers of copper.
KCM should simply settle it’s bills!
Yes KCM should pay what it owes to this Zambian company. Yaluma should even think of intervening in this, KCM management alabelela
One sided reporting. Why diidn’t they get the cec point of view?
Yaluma always seems to be partial whenever something involves KCM. Please Yaluma just tell your paymasters to settle the $30 million CEC debt. There’s just too much corruption with these PF Ministers were mining companies are concerned.
KCM is not a proffesssional entity and am getting pretty damned pissed with how they get away with literally murder.How can they justify not paying 30Million dollars as if they are not making a profit.
If i were CEC i would have taken them off the grid until the bill was settled in full plus also demand upfront payment for any future electricity supply to this mismanaged company (kwati ni ka ntemba ke ba running- fist deguliseko ma buns ti za lipilla).Nikupusa chabe
Am beginning to read between the lines: Yaluma, how much do you benefit from KCM?
Why is this minster quick to defend KCM?
..CEC must have exhausted all other avenues to come to this…..these are reversible situations….it cannot be compare to the hasty decisions of destroying peoples houses….the survival of CEC is dependent on the tariffs….if all the mines chose to behave like KCM….there will be no CEC to talk about which equally has a considerable workforce. Yaluma(govt) is supposed to be a mediator….he is not supposed to take sides at this stage
KCM getting some of their own medicine, agree that CIC should cut all supply until these crooks pay their bills. They have the audacity to say CIC must follow dispute resolution agreements where their own procedure says “do not pay your bills at all costs”
Well done CEC; squeeze them until they pay the whole amount; Just give them enough power to run the underground pumps and give them a few days day to shut down their smelting vessels in an orderly manner (to avoid destroying the vessels when copper solidifies in them) and after that squeeze again.
So this Yaluma would rather see a Zambian success story collapse than have KCM meet its obligations? One wonders how much he is being paid to shield KCM. First the Audit report which was a red herring, designed to distract us from the issues, now this. Lets be clear KCM refusing to pay its bills is what is killing the economy. Yaluma supports this? They don’t pay local suppliers period, CEC included. If they were paying local suppliers families would be able to put food on their tables. Instead local suppliers go without while KCM remits money to Vedanta that they brag about.
Mr Yaluma, we the citizens of Zambia commend CEC, for their use of Edward de Bono’s Lateral Thinking. That disreputable KCM mine needs to be paying more taxes to the region and Zambia. Someone was using all their 6 hats to come up with this ingenious way of making this mine pay up taxes owed to Zambia!! We need to roll this out to all the other mines.
I think this was demonstration of the Green Hat thinking ( The Green Hat focuses on creativity; the possibilities, alternatives, and new ideas. It’s an opportunity to express new concepts and new perceptions.)
Very creative of them!!
So KCM don’t want to settle their bills? What about asking for the other side of the story, $30 million is no laughing matter, and CEC employees also have families to feed. This was necessary.
Faka pressure iwe CEC, teach these crooks a lesson or two how to conduct corporate business: first and fundamental principle of any good business is to pay your bills on time.
Bana vipeza kuti vamene vima investors va so? Vileta chabe kantemba type of business mu zambia !