Crippling power shortages have forced Zambia’s largest copper producer, First Quantum Minerals Ltd., to halt production at one of its largest mines, the company said Monday, in a major operational scale-down that will result in the loss of nearly 1,500 jobs.
The Toronto-listed miner said that it had embarked on a “rigorous” cost-cutting program to save its $2.1 billion Sentinel copper mine following the decision of the state power company, Zambia Electricity Supply Corp., or Zesco, to slash power supplies to its operation because of a nationwide shortfall.
Until recently, Zambia has had one of the most reliable electricity grids in the region, depending on its vast hydropower plants, as well as imports from South Africa to maintain a steady supply to its mines.
But both sources have faced pressure in recent months: The worst drought in three decades has lowered water levels at dams, plunging the country into a deficit of nearly 600 megawatts, while imports from South Africa have dried up as the region’s most-advanced economy grapples with its own power-generation shortfall.
“The electricity supply is insufficient to maintain viable mining operations,” First Quantum said. “All discretionary spending has been stopped and a process of closing out contracts to reduce costs has commenced.”
The Power cuts in Zambia, coupled with falling copper prices, are increasing the risk of a credit rating downgrade at copper producer First Quantum, Moody’s said on Monday.
Moody’s, which has a negative outlook on its B1 rating for Canada’s First Quantum, said that “credit metrics may deteriorate more sharply than anticipated in the next 12 months, towards levels not commensurate with the current rating.”
First Quantum’s problems were compounded by a fall in copper prices — down about 18 percent so far this year — that is denting its revenue at a time of mounting financial pressure for the company, which is consuming cash as its develops its large, open pit Cobre Panama project, Moody’s said.
LIKE DOMINOES THE FALL CONTINUES JUST BECAUSE WE FAILED TO PLAN. WE SHOULD HAVE CONTINGENCY PLANS AS STANDAR OPERATING PROCEDURE. MINISTRY OF ENERG NEEDS TO HAVE ENGINEERS WHOSE JOB SHOULD BE TO FORECAST FUTURE DEMAND AND WHIEGH THAT AGAINST WATER LEVELS AND RAINFALL PATTERNS. THIS SHOULD NOT HAVE CAUGHT US BY SURPRISE. COMPLACENCY AND INABILITY FOR GOVERNMENT TO PLAN IS WHAT HAS LED US HERE. MEAN WHILE THE CBU CRISIS RAGES ON NOW 1500 JOBS LOST COUNTRY HAS SERIOUS ISSUES WHERE IS THE PRESIDENT? ” KUMA CAMPAIGNS”.LUNGU NEEDS TO ADDRESS CBU CRISIS BEFORE MORE JOBS ARE LOST.
It is not inability to plan, it is inability of Zambians to select a planning team, preferring to elect visionless teams.
De javu, it’s 2008 all over again! We need to brace ourselves for the impact, the world economy is crushing once more. God help us!
Where is the President? Planning for his next trip abroad? There is a crisis at home!
time and time again, Zesco has been warning that from chiluba’s regime through to the current one. its just the chickens coming home to roost as the saying goes , “as you have made your bed, you must lay in it”, the whistle was blown in the late 90s when the power utility warned of power deficits by 2004, but “Big brother ” then chose to ignore. again Zesco warned because from 2000 to around early 2004 power consumption shot up by over 700%. but instead successive ‘Big brothers” have done the opposite by actually syphoning money from zesco to fund various political activities. That’s why come 2020 some of us are going to do what we must to ensure we are part of the law makers to rescue mother Zambia.
Stoopid Zambians were PFooled by Sata that power cuts would end within 90 days in 2011 and everybody cried pabwato! Now the PFoolish liars have been exposed and we are worse off for it.
Simple ,let us go back to villages – we have miserably failed to effectively PLAN & manage the modern economic management –
Team…the only way we can get out of this power issue is to compel companies that are using more than 30 mega watts of power to have their own power producing plant. ..this this what the country of india is doing.
We can also get a good example from Dagota cement which has a plant that generates 400 Mega watts and also Zambia Suger thar produces 90% of there power and just get 10% from Zesco
God save our nation and give us serious leaders.
That makes oa lot of thinking , this is what we call research not like some pipo who just open mouth for the sac of it.
But we’re having by elections almost every day killing our own industries. The money used on these elections can be used to build another power station in luapula where we have a lot of water or at chilundu. God has blessed us with so much water but our leaders are very dull. The leaders are now shifting to Upnd, Zambia will never develop. Even under Upnd nothing will be done. We have so much selfish lazy leaders. Shame on you guys. Why should a country like Zambia fail to generate power for it’s industries?
And an NGO was ready to ask govt to borrow money for a referendum….
priorities upside down sure!
We need Solar Energy. Businesses and local Households need to invest in Solar Panels (energy). Excess can then be sold to the National Grid.
I have been saying this for years now.