Mopani demands $300 million from broke PF regime as KCM complains of expensive electricity

Zambia’s Mopani Copper Mines (MCM), majority owned by London-listed Glencore, will delay the construction of a planned copper processing plant until the government pays it $300 million the firm says it is owed in value added tax (VAT) refunds, the company’s CEO told Reuters on Thursday.

Meanwhile, Vedanta Resources’ Zambian unit Konkola Copper Mines (KCM) said on Thursday one of the biggest challenges it faced was the high cost of electricity in Africa’s No.2 copper producer.Zambia in February relaxed rules that had prevented $600 million in tax refunds being paid to mining firms such as Glencore and Vedanta Resources, bowing to industry pressure amid disputes over looming job cuts and mine closures.

However, the changes only applied to future payments and not money owed.

MCM chief executive Johan Jansen, speaking at a mining conference in Lusaka, said the company’s board had told him to use the estimated $300 million the company was owed in VAT refunds to build the Nkana concentrator.

“So until I get the VAT back for Mopani, this concentrator will be on hold. I wish to make a serious appeal to the government to sort out the outstanding VAT issues,” Jansen said.

Meanwhile, Vedanta Resources’ Zambian unit Konkola Copper Mines (KCM) said on Thursday one of the biggest challenges it faced was the high cost of electricity in Africa’s No.2 copper producer.

“One of the big challenges that we have for the future, for us to be able to stabilize our operations, is to have affordable power,” KCM chief executive Steven Din said at a mining and energy conference in Lusaka.

“The other challenge that we have going into the future is just stable policies, whether its fiscal or regulations,” Din said.

Din added that the cost of electricity had trebled over the last 10 years from what was envisaged when Vedanta invested in the country.

Zambia in April 2014 increased electricity prices by almost 29 percent for mining companies, a move the Chamber of Mines said was likely to hit mining operations.

KCM had a large power requirement as it operated one of the wettest mines and needed to pump out huge volumes of water. “That makes us the largest power user in the country, but despite that we actually pay one of the highest prices in the country,” Din said.

Reuters

 

Share this post
Skip to toolbar