THE Copperbelt Energy Corporation Plc (CEC) says its sales volumes in the Democratic Republic of Congo (DRC) this year should not be expected to hit more than the 25 per cent growth it achieved last year.
And CEC says Konkola Copper Mines’ (KCM) continued failure to pay and honour its financial obligations towards its unpaid US $150 million electricity bill remains a source of concern.
In an interview, CEC managing director Owen Silavwe said that the company’s sales volumes in the DRC were forecast to be lower this year compared to last year’s impressive performance where the utility recorded a 25 per cent sales volume growth, mainly due to the effects of the Coronavirus pandemic, which is dampening mining sector energy demand.
“25 per cent growth last year was obviously very good for the business. Whereas we’re looking to further growth going forward, I don’t think we’ll be able to achieve those levels of growth because of a number of factors: One, generally, with the COVID-19 pandemic, businesses are not doing as well as they would. Generally, commodities seem to be doing well, but overall, because of challenges in the supply chains and in trying to get businesses to perform efficiently, a lot of businesses are holding back on their planned investments,” Silavwe said.
“And one of the things you’d notice is the levels of investment, generally, in all sectors of the economy, not just in Zambia, are scaled back, particularly looking at the mining industry, we’re not seeing the huge sorts of plans meant to go into expansionary, totally new business plans at the moment. In terms of the DRC, it’s obviously a very important market for us. We’ve set up a subsidiary in the DRC; we’ve got people already employed there and are focusing on what they need to be doing.”
He, however, added that growth in regional markets where the utility operated was expected to recover on the back of normal resumption of business, particularly on the back of a COVID-19 vaccine.
“But I do expect that post short-term, after 2021, we should be getting on a very good trajectory from a growth perspective. As the vaccine is discovered and rolled out around the globe, confidence in re-investing in businesses as well as new businesses comes back. So, in the short-term, we’re obviously going to get that blip in new investments, but in the medium-to-long-term, we do expect things to normalise,” Silavwe said.
And Silavwe said KCM had still not made any progress on paying its outstanding US $150 million in its electricity bill.
“So, in a nutshell, KCM’s owing to CEC basically remains unpaid. So, that is a concern to the business. From a CEC perspective, we continue to seek an amicable solution to that. We have had some engagements with KCM; we don’t have a solution as yet on that matter. It will be good if we can get a solution in the shortest time possible because it has a significant impact on the operations of the energy sector. The amount is still just around US $150 million,” said Silavwe.
“…It’s not just CEC, but we also do owe significant amounts of money to Zesco because of that situation. So, that’s an issue that has a significant impact on the energy sector, and the sooner we find a sustainable solution to that debt issue, the better for the sector. Potentially, the knock-on effect that could have to other sectors like mining because, obviously, if the utilities don’t do well, then that has an impact on other customers as well in the various sectors of the economy. So, we do hope we can find a solution to that.”