Friday, March 29, 2024

Mopani urges CEC to honour the power agreement that was signed

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Mopani Copper Mines Plc has urged Copperbelt Energy Corporation (CEC) to honour the power agreement that was signed with the company failure to which the investment made by the company in Zambia will be put at risk.

In a statement released to the media today, the company said that it continues to pay its power tariffs in accordance with the existing contract and remains
committed to negotiating with CEC and ZESCO in good faith, but said that without a reliable power supply, the company is unable to conduct its operations safely nor maintain their workforce.

The Company further said that it was proud to be one of the largest investors in Zambia’s mining sector, having committed over USD$ 4 billion since 2000. S

“Since 2014, Mopani has invested over USD$1 billion in site expansions and upgrades to extend the life of mine by a further 25-30 years. This investment will help Zambia realise the full potential of its copper mining industry for decades to come, providing a secure platform for the Zambian industry to compete on a global scale. The
investment will also help secure jobs, local procurement and much needed revenues for the Zambian government,” read the statement

PRESS STATEMENT
FOR IMMEDIATE USE: 25 AUGUST, 2017

Mopani Copper Mines Plc wishes to confirm that power supply to our assets in both Kitwe and Mufulira remains restricted despite a court injunction ordering the Copperbelt Energy Corporation (CEC) to restore supply at the levels agreed in the Power Supply Agreement.

We wish to further advise that the case hearing of the injunction and an application for leave to commence contempt proceedings, which was scheduled for 09:00 hours this morning at the Kitwe High Court has been adjourned to Wednesday 30 August at 10:00 hours following a request from CEC’s legal representatives.

Mopani continues to pay its power tariffs in accordance with the existing contract and remains committed to negotiating with CEC and ZESCO in good faith. However, without a reliable power supply, we are unable to conduct our operations safely nor maintain our workforce.

Mopani is proud to be one of the largest investors in Zambia’s mining sector, having committed over USD$ 4 billion since 2000. Since 2014, Mopani has invested over USD$1 billion in site expansions and upgrades to extend the life of mine by a further 25-30 years.

This investment will help Zambia realise the full potential of its copper mining industry for decades to come, providing a secure platform for the Zambian industry to compete on a global scale. The investment will also help secure jobs, local procurement and much needed revenues for the Zambian government.

We urge CEC to honour the power agreement that was signed with Mopani. CEC’s current inability to do so puts Mopani’s investment in Zambia at risk.

Further details will be communicated as appropriate.

25 COMMENTS

  1. Some one took money from mopani and just signed any agreement with a lot of verbal promising……..the chickens are coming home to roost……

  2. I have said this before that Mopani has signed developmental agreements in the small print in that agreement is to keep the tariffs as they were at the time pen was put to paper ….please do not blame Mopani for your docility….respect the contract!!

    • We need to develop as a country, so we are bound to review those agreements. Lets not be held a ransom by these srumblers. We are now waking up as a nation. If some one ate from these people he must pay them back. As for us we are aware of what we want as a nation.

  3. Mopani must go home, period! They have made billions of money, inherited good assets which the privatization group gave away for a song and they keep on getting very cheap power and hide profits! Let ’em go!

  4. THIS CORRUPTION MANIFESTING OPENLY,can the Ministers that have been issuing statements on “what Moponi should not do” TELL US CLEARLY WHAT IS IN THE CONTRACT AND GOVERNMENT’S PART IN IT?? How could CEC, a private company that JUST BUY POWER FROM ZESCO GUARANTEE A PRICE for the electricity it does NOT PRODUCE BUT ALSO BUYS FROM ZESCO?? Like @2 Jay Jay has put,there is something fishy,IT MEANS SOMEONE COMMITTED ON BEHALF OF ZESCO that prices will never change! HOW CAN ONE COMMIT FOR 40 YEARS WHEN THINGS ARE CHANGING SO FAST THESE DAYS?? Mopani is now blackmailing us as if they could have invested the $4bn in 17 years an average of $240,000/year in the air?? I wish parliament could take government to task!!

    • Parliament is full of grade 12s who do not know their role …they are just happy earning K100 000 per month for doing nothing

    • The Power Purchase agreement does not say tariffs will never change. It provides for increment based on a Mutual understanding. So basically what Mopani is saying is the increment came without a mutual understanding an act that is against the signed contract.

  5. ELEPHANT IN THE ROOM.
    THE WHOLE CEC ARRANGEMENT REQuIRES OVERHAULING
    CEC ONLY DISTRIBUTES POWER FROM ZESCO AND THUS ADDING TO COSTS.
    SCRAP IT AND ZESCO WILL MAKE MORE MONEY AND REDUCE TARRIFS TO THE REST OF THE COUNTRY.

  6. Mopani must not operate like Hichilema who has only one solution to his political problems and sticks to it even when it’s not workable! Petition must be heard? Come on, buy power direct from Zesco, it will be cheaper than from CEC which is just a parasite institution. CEC must generate its own power than entirely rely on Zesco, it’s not sustainable.

  7. As the government constantly reminds us in democratic zambia rule of law is how we function. A contract has been signed sealed and delivered let rule of law prevail as it should in a democracy

  8. Unless it’s a poorly drafted contract, there’s always a close that provides for changes especially when such circumstances arise

    • @ Masalamuso, but the contract does stipulate procedures to follow when negotiating new tariffs. CEC increased tariffs without following these procedures. This is the contention and CEC are behaving like a spoiled child. CEC should never have been privatized in the first place. It should have been sold to Zesco and these issues would not be here. Some one conned the government into privatizing CEC.

  9. Ayotollsh WTF are you talking about… who ever signed it didnt not read it, it happens in zambia even the president signed the constitution without reading it by the way i think you meant to put clause not close..
    Rule of law has to prevail

  10. CEC will lose this case; regardless of the unavoidable tariff increases, in business, you ought to respect your contractual obligations. You cannot bull-doze. CEC just needed to renegotiate their Power Supply Agreement with Mopani otherwise they will cause the loss of mine jobs…..

  11. If there is a contract honor it Zambia is so used to street vending. Mining is not a katemba at city market which you can harass at any time.

  12. one wold wish in these events that the utilities would have more capital and simply generate and transmit power into the SPOT MARKET and those with peak demand manage their cash flows as opposed to these OLD methods of PPAs

    Its understand stoop power projects are capital intensive and would require a firm off taker with back to back PPAs or IS IT Bulk supply agreements, what is the difference ??? Should you also have PPAs for commissioned projects that have lasted 30 years when costs should have been recouped and Bulk supply agreements or SPOT markets taking effect with those clauses appropriately tailored e.g. deemed supply etc. and capacity charges…

  13. appropriately to secure that power when needed We hope most of these utilities can show financial engineering and attractiveness of their balance sheets and do power projects away from the traditional PPAs arrangements to make help them more flexible Its not always that in Power Projects and EPCs there has to be a PPA more so that you are trying to go the spot or DAM way in the eyes of SAPP

    Even then the price embedded in the PPAs or BSA must be forward looking as in LRMC scenario with clauses carefully worded to ensure the off taker recoups comfortably before 25 years and those PPAs near the end

    The truth of the PPA and agreements must be in good faith and…

  14. Rather the reasoning of the PPA and agreements must be in good faith and parties allowed to meet on the table as opposed to the LONDON way always The arbitration process in the PPAs or BSA must be clear and straight and in the spirit of mutual benefit as parties would still do business One would have hoped this to have been resolved within the CURING period as in the PPAs if any

    One would also have hoped the ming sector to have been the first in the tariff review then the rest commercial and residential in that order received

    To increase tariffs for a mine that is purely financed on its capital structure by …………and is lockup in its cash flows will require prudency…

  15. Negotiating and allowing the mine to have a cash plan to address the Tariff will not be a bad idea also

    To create a national Company (Bulk supply company that will buy off power and trade from and to companies in control areas will also help the cash flows for these firms in the energy sector and leave the market to grow and solidify with appropriate instruments in place You will need such even with Mopani or other parties long gone and ensure This will remove the issues of hiding behind PPAs by either party

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