First Quantum Minerals says it was on course to meet quarterly production guidance from its Kansanshi and Sentinel after reaching agreement on a power levy.
The company said in July that copper production guidance from Kansanshi for the year had been increased to some 248,000 tonnes from 240,000t previously, while output from Sentinel had been lowered to 185,000t (195,000t).
In terms of the electricity supply agreement with ZESCO, First Quantum will pay an increased levy of $0.09 per kilowatt hour.
In return, First Quantum will be allowed to import a portion of its total power requirements from alternative suppliers.
The power levy had been a bone of contention this year after the firm refused to pay the increased rate.
This led to ZESCO cutting power to Kansanshi and Sentinel, effectively registering another political headwind for First Quantum which has been embroiled in a number of disputes with government.
In terms of the agreement, the increase in the power levy – from a previous level of $0.06/Kwh – would be imposed in two increments with the first increment beginning immediately.
The balance of the increase would be applied once the power import deal had been agreed and formalised.
The tariff will also be reviewed on finalisation of a ‘cost of service study’ which has been commissioned by the Energy Regulation Board, said First Quantum.
The study is expected to be available in early 2018.
“The tariff is backdated to January 2017, with a portion of the arrears to be applied to improving the stability of power supplies for Kansanshi and Sentinel. The Zambian government and ZESCO have committed to provide continuous unrestricted supply of power to First Quantum’s operations and to facilitate the importation of power from alternative suppliers,” it said.
“The four-week scheduled maintenance of the Kansanshi smelter was completed within the planned time period. The staged restart and ramp-up process was initiated on September 12; steady-state operations are expected during the week beginning September 18, 2017,” the company said in an announcement.
THEY ARE ALWAYS BEATING ZAMBIA with their tricks!! Are they going to pay import duty, excise and VAT on imported electricity?? How much are they going to pay for “wheeling” their imported power on the Zambian (ZESCO) network?? It is likely they have been given a FREE DEAL TO LAND THEIR IMPORTED POWER AT THE MINES otherwise the cost for them would have been the sane as buying all ZESCO Power!!