ZAMBIA EXPECTS TO AGREE ON HIGHER ELECTRICITY PRICES WITH MINING COMPANIES THIS YEAR

ZAMBIA EXPECTS TO AGREE ON HIGHER ELECTRICITY PRICES WITH MINING COMPANIES THIS YEAR IN A MOVE THAT IS LIKELY TO INCREASE COSTS IN AFRICA'S TOP COPPER PRODUCER.

COPPERBELT ENERGY CORPORATIONS(CEC) MANAGING DIRECTOR FOR OPERATIONS NEIL CROUCHER, TOLD REUTERS NEWS AGENCY THAT NEGOTIATIONS FOR HIGHER POWER PRICES, WHICH STARTED LAST YEAR, ARE NEARING CONCLUSION.

MR CROUCHER SAYS  STATE-OWNED ZESCO LTD, WHICH GENERATES ALMOST ALL THE ELECTRICITY CEC SUPPLIES TO THE MINES, LAST YEAR REQUESTED THAT POWER PRICES BE RENEGOTIATED AND THAT CEC ALSO STARTED PARALLEL NEGOTIATIONS WITH THE MINING COMPANIES.

MR CROUCHER FURTHER SAYS  THESE TWO PROCESSES ARE RUNNING CONCURRENTLY AND  ARE NOW LOOKING AT THE POSSIBILITY OF CONCLUDING AND IMPLEMENTING THE NEW CHARGES LONG BEFORE THE END OF THIS YEAR.

HE SAYS  THE INCREASES WILL AFFECT LONDON-LISTED VEDANTA RESOURCES PLC, GLENCORE INTERNATIONAL AG OF SWITZERLAND , SOUTH AFRICA'S METOREX AND BRAZIL'S VALE.

HE HOWEVER DECLINED TO STATE THE PERCENTAGE PRICES WOULD BE HIKED.

ZAMBIA'S COPPER AND COBALT OUTPUT IS EXPECTED TO RISE STEADILY AS SMELTERS AND MINES RE-START PRODUCTION, AFTER CUTTING BACK OR HALTING OPERATIONS DUE TO THE GLOBAL FINANCIAL CRISIS, AND MOVE TO FULL OUTPUT.

MR CROUCHER SAYS  THE OPENING OF NEW MINES AND EXPANSION OF EXISTING PROJECTS WILL ALSO BOOST POWER DEMAND.

HE HAS EXPLAINED THAT INVESTMENT IN THE POWER SECTOR REMAINS CRITICAL AS POWER AVAILABILITY WILL EMERGE AS ONE OF THE KEY CONSTRAINTS FOR FUTURE GROWTH AND DEVELOPMENT IN ZAMBIA.

MEANWHILE, FIRST QUANTUM MINERALS SAYS ITS FIRST-QUARTER COPPER PRODUCTION WAS HIT BY A SHUTDOWN OF OPERATIONS AT ITS FRONTIER MINE IN THE CONGO.

COPPER PRODUCTION FELL 13.5 PER CENT TO 74,900 TONNES IN THE FIRST QUARTER OF 2011, COMPARED WITH 85,062 TONNES IN THE SAME PERIOD OF 2010.

FIRST QUANTUM, WHICH SUSPENDED OPERATIONS AT FRONTIER IN AUGUST AFTER LOSING ITS EXPLOITATION LICENCE IN THE CENTRAL AFRICAN NATION, INCREASED PRODUCTION AT ITS KANSANSHI MINE IN ZAMBIA AND AT ITS GUELB MOGHREIN MINE IN MAURITANIA.

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