By GRACE CHAILE LESOETSA
COPPERBELT Energy Corporation (CEC) PLC has sought leave of the Lusaka High Court to commence arbitration proceedings against Konkola Copper Mines Plc (in liquidation) for alleged failure to settle a debt amounting to over US$150 million.
CEC stated that as at June 3, 2021, the total debt (inclusive of interest) owed to it by KCM stood at US$151,892,261.37.
“Is made up as follows: US$ 328,086.14 being the amount owed by KCM resulting from the Supply and Purchase Agreement (PSA ) before the Provisional Liquidator’s appointment by order dated 21st May 2019; and the sum of US$151,564,175.23 being the amount owed by KCM to CEC resulting from the Supplemental Agreement executed by CEC,KCM and the Provisional Liquidator,” it stated. According to an affidavit in support of originating summons for leave to commence arbitration proceedings against KCM, CEC chief financial Mutale Mukuka stated that the company entered into power supply agreement with the giant mining firm whose term expired on May 31, 2020 following various agreed extensions.
But about February, 2019, KCM begun defaulting on its payments for electricity supplied to it under PSA .
Mr Mukuka stated that after consultations with both Zescp limited and the Ministry of Energy, CEC notified the Mine of it’s intention to restrict power supply as per the terms of the PSA.
However, he stated that seven days before the restriction notice could be enforced, winding up proceedings were commenced against KCM by ZCCM-IH on behalf of Government.
Mr Mukuka stated that CEC could not enforce the restriction notice which should have taken effect on May 28, 2019 as endeavors were made by Government to ensure CEC continued to support the operation of the Mine.
“That despite numerous reminders KCM has neglected or refused to settle the accrued debt to CEC. That I have been advised by our advocates and do verily believe that since KCM is under Provisional Liquidation , no proceedings may be initiated against the company without leave of court. That it therefore has become necessary that the applicant seek leave of court to commence arbitration proceedings against KCM,” Mr Mukuka said.