No vision: Zesco to cut power to mines by 16%, production going down

No vision: Zesco to cut power to mines by 16%, production going down

These machines will start operating at half capacity

These machines will start operating at half capacity

The government through Zesco plans to cut electricity supplies to mining companies by as much as 16 percent because of a shortage, according to state-owned electricity producer Zesco Ltd.

The company will reduce power to Copperbelt Energy Corp., which supplies almost all mines in the southern African nation, by as many as 240 megawatts daily, according to a Zesco letter sent to mining companies last week and given to Bloomberg on Monday by an industry official. The official asked not to be identified because the letter isn’t public.

Zambia has the capacity to generate about 2,200 megawatts of power, of which copper producers consume about two-thirds. The amount of electricity that’s being rationed would be the largest in at least four years. Companies including First Quantum Minerals Ltd., Glencore Plc and Vedanta Resources Plc operate mines in the country.

Zambia is facing a 560-megawatt deficit due to poor planning but the government blames God for sending little rains. Last week, Zesco ordered mining companies to cut usage because of the shortage, and began daily rolling cuts to households and businesses that last eight hours.

A line connecting the country to the Democratic Republic of Congo enables it to export as many as 250 megawatts to Africa’s biggest copper producer, according to Copperbelt Energy’s 2014 annual report.

Any impact on Zambia’s copper output may cause economic growth to slow further after the government already cut its forecast to 5.8 percent this year from more than 7 percent. Mines Minister Christopher Yaluma said June 6 that copper output in 2015 won’t beat last year’s total of 708,258 metric tons, after low prices and a dispute over a new tax system caused production to slow. The country’s corn crop also shrank this year as a result of lower rainfall.

Chama Nsabika-Kalima, a spokeswoman for Copperbelt Energy, didn’t answer a call to her mobile phone and didn’t reply to an e-mail seeking comment. Kapata of Zesco didn’t answer a call to his mobile phone nor respond to a text.

The cuts to mining companies will range from 40 megawatts from 6 p.m. to 9 p.m., increasing to 240 megawatts from 10 a.m. until 6 p.m., the Zesco letter dated June 23 shows. Copperbelt Energy plans to meet with its mining customers to discuss how to minimize the operational impact of the cuts, according to a letter sent to them, dated June 26.

Bloomberg

Share this post