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Friday, August 14, 2020

Minister of Energy assures Mines of power as CEC deal deadline looms

Economy Minister of Energy assures Mines of power as CEC deal deadline looms

Copper mines in Zambia will have continuous electricity even if a supply deal lapses next month with no agreement to replace it, Energy Minister Matthew Nkhuwa said.

Most producers buy power from Copperbelt Energy Corp., which in turn purchases it from state-owned ZESCO Ltd. under a two-decade old accord.

That pact expires on March 31 and an industry lobby group flagged uncertainty surrounding it as the biggest risk that copper mines face this year.

“I don’t think we’ll get to a point where we are going to switch off power to the mines,” Nkhuwa said in an interview in his office in Lusaka, . “We’ll never get to there.”

Mines in Zambia account for about half of the southern African nation’s power consumption, and contribute about 70% of export earnings, so any disruption in supply could have a massive impact on the economy.

The government’s foreign exchange reserves are already near a record low, and economic growth last year was the slowest in more than two decades.

Mr. Nkhuwa said Zesco and CEC are in discussions and the government is monitoring these and has set a time-line for a conclusion before the end of March.

“If the worst got to the worst, the President can use his powers and declare a decree,” he said.

“That is strategic economic equipment, and if there was no power supplied, it would be sabotage of some kind to the whole country.”

Mr Nkhuwa said the government won’t use a new bulk-supply deal to increase power tariffs for mining companies, rather a cost-of-service study that’s underway and due for completion by year-end will determine any changes to electricity prices the mines pay.

[Bloomberg]

11 COMMENTS

  1. This is the time for CEC to cash in, sell their assets to Zesco and invest the cash into other lines of business. Since no power can reach the mines without CEC infrastructure, the two can agree a transmission fee in the interim period.

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  2. I cant take anything from this minister. He is the same one who assured us that there will be no loadshedding…….and the opposite came true. He lied about a deal with ESKOM, which was just in his head….

  3. Of course I remember he said there would be no load shedding just to get the opposite, but there is another one who even said the black mountain was safe for our youths only after a fortnight to lose 12 precious lives. They say anything because there is no reprimand or sanctions from anybody, so it is a free for all type of arrangement

  4. CEC should hang in there, help is coming from HH.
    But HH naena why not take advantage of Zesco to finish off PF before 2021 deadline?

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  5. CEC has all its eggs in one basket, that is, supplying power to mines on the Copperbelt. That’s not a very good investment strategy. Wht happens whn Copperbelt mining ends? They’re better off selling now and invest the cash in their own power plants. In fact by removing CEC from the power supply chain to the mines, Zesco will sell the power to the mines at a better margin than at present while the mines will also get it at better margins than they do whn they buy from CEC.

  6. “Copper mines in Zambia will have continuous electricity even if a supply deal lapses next month with no agreement to replace it” Energy Minister Matthew Nkhuwa said.
    You think the mines are cadres you promise with empty words…these are businesses with shareholders. FQM forsaw something like this years hence procured that powerplant in Botswana.

  7. When it comes to us domestic consumers they treat us like rubbish..this moron has never told us about the £27milion paid to Eskom.

  8. Nhuwa for President. He is the best MP. He has improved communities in Chingola and was already a rich man before he went into politics.

  9. #Nemwine “..In fact by removing CEC from the power supply chain to the mines, Zesco will sell the power to the mines at a better margin than at present while the mines will also get it at better margins than they do when they buy from CEC…”.

    That is typical of cadre mentality, better said than done, have you thought about what Zesco will do with those “better margins”? Or how prudently they use their current income? You must learn to avoid blaming others for your seld inflicted failures, look t yourself first before you criticise others.

  10. @ Nostradum: WHAT DOES “CEC should hang in there ..help is coming from HH.” MEAN?
    ARE YOU HAPPY THAT CEC IS RIPPING THE COUNTRY FOR THE BENEFIT OF THE THIEVES WHO ROBBED ZAMBIANS WHEN THEY SOLD THE THE POWER COMPANY TO THEMSELVES AND ARE NOW BILLIONAIRES.
    CEC SHOULD BE NATIONALISED IF THOSE THIEVES ARE PLAYING HARD BALL WHILE WAITING FOR THEIR CONSPIRATOR HH AS NOSTRADAMUS IMPLIES.
    THIS BY THE WAY THIS SUMS UP THE STRATEGIES OF HH AND HIS SPONSORS: THEY ARE WAITING TO COME AND LOOT THE COUNTRY

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