LUSAKA, Feb 26 (Reuters) - Zambia’s sole power distributor to the copper mines has cut supply by 15 percent to match lower demand from the mines as metals prices fall, a company official said on Thursday.
Hanson Sindowe, executive chairman of the Copperbelt Energy Company (CEC) CEC.LZ also said power supply to the mines was expected to fall further as mines suspended projects.
“We expect this year to be a very difficult year for a number of our customers. The demand from the company’s customers is expected to decrease in the short term as some have reduced mining operations,” Sindowe told journalists.
“We have a 15 percent reduction in (power) supply,” he said.
Luanshya Copper Mines (LCM), which operated the Baluba copper mine and cobalt producer Chambishi Metals Plc and planned to develop the $354 million Mulyashi mine project, has suspended output at its units as a result of the global financial crisis.
CEC’s also reported on Thursday its annual revenue rose 35 percent to $177.5 million in 2008 from $131.7 million the previous year.
Sindowe said CEC had been granted a concession by the government to build a 34 megawatts power station at an estimated cost of $80 million in partnership with Tata Africa Holdings Ltd.
Construction of a 220 kv power supply line to link Zambia and the Democratic Republic of Congo would start this year.
Despite lower demand for electricity from mines, Sindowe said the CEC still planned a feasibility study for a new hydro power project.
“In the long term, the company’s customer demand is expected to increase, leading to increased turnover,” Sindowe said.
Sindowe said CEC and Glencore International AG [GLEN.UL] would launch a joint bid to develop the Kafue Gorge lower project, which the government estimates will cost around $1.5 billion to generate up to 750 megawatts, the bulk of which would be supplied to the Zambia copper industry.
Sindowe said a project to build transmission power lines to the Konkola Deep Copper Mine (KDMP), a unit of Konkola Copper Mines (KCM), which is majority owned by London-listed Vedanta Resources Plc (VED.L), was underway. The KDMP will produce 150,000 tonnes copper per year starting from 2010. (Editing by Sue Thomas)