Zesco Limited managing director Victor Mundende says the power utility has made good progress in migrating electricity tariffs applicable to mining companies who have now moved to an average nine US cents from three.
Speaking during a press briefing in Lusaka, Wednesday, Mundende narrated that Zesco had made progress in migrating electricity tariffs applicable to mining companies, such as Barrick’s Lumwana, who had now moved to paying an average nine US cents per kWh from three.
Mundende was addressing a question posed on whether the tariffs being paid by some of the mining firms were profitable enough for the power utility.
“We have made a lot of headway in terms of migrating their tariffs. Previously, their tariffs were lower than the current levels. And we are not sitting ducks, we are actually also trying to migrate them; the average is close to 9 (US cents per kWh) so, very soon, they will be at 9.3. Some have moved from three US cents! Three cents to the current levels is not a joke, so we are trying to ensure that we equitably share this burden,” Mundende told journalists during the question and answer session.
“In terms of mining (tariff agreements); in the Copperbelt, we are not supplying directly to the mines, we are supplying (electricity) to CEC (Copperbelt Energy Corporation Plc), who then supplies the mines. We have an agreement with CEC, a bulk supply agreement. And then, the other mines: Lumwana, Kansanshi and Kalumbila, we are directly supplying them.”
The briefing was organized to launch Zesco’s sensitization campaign on their electricity tariff application that was submitted to the Energy Regulation Board (ERB) where the former hopes to hike retail power tariffs up by an average 91 per cent.
According to Zesco’s analysis of regional tariffs within the SADC region, Zambia is the second lowest with an average tariff of about 6.5 US cents per kWh.
In justifying their application to increase electricity retail tariffs, Zesco demonstrated that its total operating costs rapidly climbed to K13.46 billion last year from K2.1 billion in 2011 to due to an increase in both cost of sales and other operating costs over the period.