Zambian mines’ energy demand up

Lusaka ‑ Electricity demand from mining companies in Zambia, Africa’s top copper producer, rose 12 percent as of June 30, 2013, as demand for energy in the country’s mining sector increases.

Copperbelt Energy Corporation (CEC) buys on average 530 megawatts a day from state utility, Zambia Electricity Supply Corporation (Zesco) and re-sells to mining companies on the copperbelt.

CEC recoded an increase in sales during the six-month period ending June 30, 2013, compared to the same period last year, the company says in a statement.

Energy demand rose to 2 133 gigawatt hours (GWh) from last year’s 1 912 gigawatt hours chiefly on account of the high sales volumes to the mines. 

The company’s net profit grew by four percent compared to the first six months of 2012.

CEC’s core business involves the use of extensive power transmission and distribution infrastructure within the copper-rich region to reliably and efficiently provide energy for use by mining companies that consume 50 percent of an average 1 400 megawatts generated daily in the Southern African State.

The energy company also provides electricity to the mining sector through its network on behalf of the utility company, Zesco. 

It further operates an interconnector facility, which it uses to tap power for the mines from the Democratic Republic of Congo (DRC) in case of power outages.

But profit attributable to shareholders and the earnings per share dropped due to increased finance costs on account of financing new investments including Kabompo hydro power plant, which the company is constructing in north western Zambia to add more energy to the national grid.

Since the privatisation of the mining conglomerate in the late 2000s, the mining sector has recorded US$8 billion in investment into old and new projects countrywide.

On future projections, CEC plans to consolidate its investments in Zambia and Nigeria and seeks to develop other projects, including the completion of a feasibility study for potential hydro projects on the Luapula River near the DR Congo.

CEC shareholders also approved the company’s desire to float a rights Issue to provide additional equity funding for its expansion projects in Zambia and Nigeria to meet demand, with details of the issue to be availed after approval of the company’s board soon, the company revealed in a statement.

A recent report by the World Bank indicates that Zambia will require not less than US$14 billion to meet all energy needs for domestic consumption and export.

The financing will assist expand transmission and power distribution infrastructure countrywide to meet increasing demand for energy to meet the escalating demand for power both for local and export consumption.

Zambia is failing to meet electricity demand, which peaks at 1 750 megawatts against a production of 1 400 megawatts daily – resulting in a shortfall of 250 megawatts. 

This has prompted the power utility, Zesco to ration power – disadvantaging many end-users, especially mining companies.

In an effort to increase energy generation capacity – Zambia has embarked on a US$4 billion Batoka Hydro power plant to be constructed jointly with Zimbabwe and is expected to generate 1 800 megawatts at completion in 2018. 

Other projects include expanding the Kariba North Bank and constructing the Kafue Gorge Lower which is expected to contribute 1 700 MW.

September 2013
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