MINE CRISIS DEEPENS

Wed, 23 Aug 2017 10:40:10 +0000

By Bennie Mundando and Chintu Malambo

WHY should power being produced in abundance by ZESCO be restricted to produce job losses in the mining sector, Zambia Republican party president, Wright Musoma has charged.

Mr Musoma , who was reacting to looming job losses at Mopani because of restricted power supply by CEC, said each day lost was production lost, just as power generated that day will not be recovered.

He has called for a probe into the saga to establish why this impasse, which may lead to job losses, has been allowed to continue.

He said Energy minister, David Mabumba should consider finding out the shareholders of Copperbelt Energy Corporation (CEC) because he may be aiding wrong people and cause thousands of miners to be jobless.

Mr Musoma said that the minister needed to find out who was controlling CEC because it was not just job losses at stake but even the economy would be affected.

He said government should look at the plight of the more than 4,000 people who jobs might be affected.

“Mr Mabumba may wish to go and seek to the drawing board table, we have revealed this as Zambian Republican Party that he may find himself being used to harass Mopani so that they lay off thousands of workers and then tomorrow, the same people will start blaming the minister that he is a failure,” he said.

Over 4,000 miners at Mopani Copper Mine (MCM) may lose their jobs following a power supply stand-off between the mining company and the Copperbelt Energy Corporation (CEC) after the latter’s decision to unitarily increase electricity tariffs without engaging the mines.

MCM public relations manager Nerbet Mulenga told the Daily Nation yesterday that even though the company was optimising the limited power it was receiving from CEC, scaling back its operations had become inevitable as the company was forced to shut down some sections of the mine.

“Although we shall work on optimising the use of the limited power that we are receiving, we expect that we shall effectively have to close several areas and our scaled back operations may affect a total of 4,700 direct employees. We are engaging with the unions and other stakeholders to see how we can mitigate the effects of this unavoidable course of action.

“We regret to advise that it has become necessary for MCM to curtail some areas of its operations due to the restriction of power by CEC and this decision has been necessitated by the unilateral action by CEC to restrict power supply without notice and against the provisions of the Power Supply Agreement (PSA),” Mr. Mulenga said.

He said MCM had continued to negotiate with CEC and ZESCO in good faith but that without adequate power supply, the company was unable to maintain its workforce despite the mining giant being one of the largest investors in Zambia’s mining sector, having committed over US$4 billion to its business since 2000.

“Since 2014, Mopani has invested over USD$1 billion in site expansions and upgrades to extend the life of the mine by a further 25-30 years. This investment will help Zambia realise the full potential of its copper mining industry for decades to come, providing a secure platform for the Zambian industry to compete on a global scale.

“This investment will help secure jobs, local procurement and much-needed revenues for the Zambian state but CEC’s inability to honour its agreement with Mopani puts this investment at risk,” he said.

Mr Mulenga said mining companies were operating under a PSA dated March 31, 2000 which was amended on March 6, 2015, and valid until 2040.

He said the PSA strictly sets out the agreed tariff and increases during the contract period which CEC abrogated.

He said the contract provides that electricity tariffs may be increased on agreement by both parties as the case was in 2008 when Mopani agreed to a tariff increase of 33 percent over and above the contractual tariff.

“The current proposed revision would result in a further increase of 54 percent. Within the provisions of the agreement, there are clear steps to be taken in the event of an impasse on tariffs.

These dispute resolution steps have unfortunately not been followed by CEC, which instead chose to resolve the impasse by a unilateral restriction of power supply. Efforts to compel CEC to abide by the PSA have unfortunately been ignored,” he said.