KONKOLA Copper Mines (KCM) provisional liquidator Milingo Lungu says the mining company entered into an agreement with Copperbelt Energy Corporation (CEC) Plc that the US $144 million debt owed to the power utility would fully be settled once it was sold.
In an interview, Milingo said the mine did not unilaterally refuse to clear the debt.
“Firstly, with CEC, when the liquidation process started, we entered into an agreement where it was agreed between ourselves and CEC that the bill will accrue until the mine is sold, and then when the mine is sold, they will be paid from the proceeds of the sale. And CEC only asked to say, ‘if that is the case, can you pay us the arrears, which accrued by the time we had taken over the mine in May, which was about US $46 million and we did settle that amount in October. So, in terms of not paying them, it was by way of agreement because by definition, if a mine is operating the way we are operating, we can’t pay all bills as and when they fall due. So, there was an arrangement in place, it’s not like we simply ignored to pay them from day one,” Milingo said.
He said the rise in the copper prices on the international market put KCM in a better position to pay CEC and still meet its obligations to Zesco.
“In terms of Zesco, yes, we have certainly put in place measures to pay them [Zesco], but also, you have to be mindful that we also owe CEC money so we are actually…in fact, we have been trying to get in touch with CEC to see if we can work out a plan to pay them, not the entire amount, but obviously to see how we can structure some payments. But at the same time, we also have to be current with our obligations to Zesco. With the copper price obviously picking up, it makes our position in a better place to be able to service the debt to Zesco. You recall when this issue started with CEC and so on, the copper price had gone to US $4,000 per tonne then there was the issue of COVID-19, which circumstances were beyond our control, but the outlook now for the copper price looks promising and certainly from those revenues, we will look to settle the Zesco debt,” Milingo said.
And Milingo said KCM had so far not faced any problems with power supply from Zesco and were enjoying a better price than what was offered by CEC.
“It’s only a month into the deal, but so far, we have had no challenges, and I mean, Zesco knows what they are doing. They do it for other mines in Lumwana and Kalumbila and in terms of the cost, obviously, we can’t go into details, but it’s lower than CEC. It goes without saying, it will be lower since CEC used to add a mark-up,” said Lungu.