Publish mine electricity tariffs, Chamber of Mines challenged

Tue, 04 Jul 2017 10:27:53 +0000

By SANDRA MACHIMA

THE Chamber of Mines have been challenged to publish tariffs at which mines are paying following reports that ZESCO does not subsidize electricity to the mines.

Energy expert Johnstone Chikwanda differed with the Chamber of Mines over the alleged electricity subside that the mining industry was still enjoying.

Mr Chikwanda said electricity availability in Zambia was an aggregate of what ZESCO produces, plus import uptake from independent power producers (IPP) in Zambia, some of whom were selling to ZESCO at more than $12 cents following the high cost of imports. ZESCO’s operational costs exacerbated by the exchange rate, maintenance costs of aged equipment and expansion programme have also spiked over the last decades.  Mr Chikwanda said the claim from the Chamber of Mines was coming at a wrong and sensitive time when government was removing subsidies by end of the year.  “The Energy Forum Zambia is of the opinion that the Chamber of Mines is being economical with truth and may be hiding in technicalities around the structure of bulk electricity supply contracts,” he noted.

Mr Chikwanda said the Chamber of Mines was therefore requested to inform the public how much each of their mines was paying for the electricity so that the public could believe its claim that the mines had not been benefiting from electricity subsidies.

“We import electricity at more than $13 cents and they buy it from ZESCO at less than US8 cents and they say they are not subsidizing them,” he said.

He observed that the average price of electricity ex-transmission line whether it was imported or locally produced electricity without cost of distribution segment still remained higher than what mines were paying.  The energy expert reiterated that from a moral perspective, when the circumstances had significantly changed as was the case now due to severe energy poverty, companies with good corporate ethics were expected to accept reality and accept new tariffs, even if they might not be linked to the cost of electricity production, cost of imports and purchase from independent power producers since at the time those contracts were being negotiated when Zambia had excess electricity. He said although the mines were commended for contributing to the economic growth of Zambia for being the biggest consumers of both fuel and electricity, it was vital that they also paid at the current electricity tariff rates.