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Government efforts to stabilize the mining sector, as impacts of the COVID-19 pandemic unravel have heightened CEC’s optimism into the future.
“Efforts across the globe to find a lasting solution to COVID-19 give us a measured sense of confidence that stability and focus on growth should return over the medium to long term,” said.
However, CEC has noted that the key downside risks to demand in the short- term include the mining fiscal regime, seen as being unfavourable by the mines, and the impact of the novel coronavirus disease (COVID-19), which are yet to be fully understood at this stage.
Meanwhile the company’s supply of power to the mines remains the largest business segment by revenue.
CEC has highlighted that it’s achieving stability in this segment by finalising future supply arrangements, a key priority for the company.
The development comes at the backdrop of the main supply agreement, the Bulk Supply Agreement (BSA) that has underpinned the company’s source of power for several years expiring at the end of March 2020.
CEC and ZESCO, with the support of the government have continued negotiations to put in place a successor agreement to the BSA.
The first round of negotiations ended without the parties agreeing due to outstanding differences on some key terms.
According to the company achieving predictable, stable and long-term power supply arrangements through win-win long tenured agreements is not only important to CEC but is highly beneficial to the industry as a whole.
