15 August 2017

Zambia: Mopani Suspends Ops... Thousands Sent Home As Tariffs War With Cec Forces Mine to Shut Down

Mopani Copper Mines (MCM) has suspended production operations in Kitwe and Mufulira in light of the power supply restriction imposed by Copperbelt Energy Corporation over a tiff on tariff hikes, forcing hundreds of workers to stay home.

In a statement issued by the MCM public relations manager Nebert Mulenga yesterday, the mining giant, employing thousand of miners has been forced to turn away workers involved in actual production of copper, due to the power cut.

"Mopani Copper Mines Plc wishes to confirm that all production operations in Kitwe and Mufulira

have been suspended with immediate effect until the restriction of power supply is resolved.

"Despite an injunction being granted by the Courts of law on Friday (11th August 2017), power has not yet been restored to our assets. This relates to the implementation of new electricity tariffs, which Mopani and other mining companies have contested in court and the courts of law are yet to resolve the matter," Mr Mulenga said.

While awaiting the determination of the matter in court, MCM indicated that it had continued to consistently pay the tariffs as stipulated in the existing legal contract with CEC.

"All our employees in affected operations are now being sent home. They will continue to be paid

as per their contracts.Further details will be communicated as appropriate," he added.

On the other hand, CEC corporate communications senior manager Chama Nsabika said MCM has rejected the industry-wide upward adjustment of tariffs, forcing the power utility company to restrict the supply of power to the mine.

Ms Nsabika said in a statement that in November last year, the company's main supplier of power, Zesco, commenced negotiations with CEC and mine customers with a view to agreeing to an upward adjustment to the applicable tariffs effective January 1 this year.

Ms Nsabika said the negotiations were seen as a stop-gap measure to help bridge the gap between the increasing costs of providing electricity and the prevailing tariffs to various customer categories, while awaiting the results of the cost of service study being specialised by the Energy Regulation Board (ERB).

She said in a statement yesterday that to date, MCM had rejected the industry-wide tariff increment and sought to continue to pay for the electricity they consumed at the old tariff and that CEC was left with no option but to restrict power supply to levels commensurate with the monthly payments that the mine continued to make to CEC.

"It is already eight months since the new tariff was implemented, outstanding amounts due from MCM have escalated and it has become unsustainable for the utility to continue supplying the mine with their full power," she said.

The National Union of Miners and Allied Workers (NUMAU) has called for dialogue between CEC and MCM.

NUMAU president James Chansa said the only advice the union could offer to the two parties was to call for dialogue and give each other time and chance to resolve the matter unlike resorting to restrict power.

Mr Chansa said at a Press briefing in Kitwe yesterday that restricting power was not a solution as it could adversely affect the operations of the mine, thereby having hundreds of workers losing their jobs and becoming vulnerable.

"It is the hope of the union that the advice to have the two engage in dialogue will be adhered to, otherwise if the situation goes beyond here, there will be need to call on the Government to intervene," he said.

Last week, a number of workers were sent home prematurely as CEC restricted power to the mine.


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