Electricity tariffs for mines not subsidised

Zambia Chamber of Mines president Nathan Chishimba says electricity tariffs for the mines are not subsidised as perceived by many people, but Zesco Limited finds it cheaper to supply power to those buying the commodity in raw form direct from the transmission network.

Mr Chishimba said there has been greater minerals’ policy stability in the last 18 months that resulted in improved copper production.

“This positive development is also supported by the improved external environment but we need to address certain issues such as power, adequate mining skills and minerals policy environment that investors are thinking about to ensure financial inflows into Zambia.

“We need reliable power supply and long-term reforms in the energy sector, but there is a myth that mining tariffs are subsidised by other users. This is technically incorrect, since it is cheaper for an electricity company to supply power to a mine than a residential home,” he said in an interview on the sidelines of the just ended Zambia International Mining and Energy Conference.

Mr Chishimba said Zambia’s large mining operations draw their power in raw form direct from the transmission network.

“The mines build and maintain their own sub-stations, transformers and their own distribution network. They take responsibility for distributing electricity to their own operations and often to surrounding communities, whereas Zesco is responsible for all these additional steps for all other users, whether residential or commercial,” he said.

In a separate interview, Minister of Mines Christopher Yaluma said the performance of the mining industry depends on joint collaboration between Government and the mines.

“We have had rough times before but dialogue is the solution to ensure progress. When the country experienced power deficits, interventions were made to ensure the survival of the mines through importation of power.

“Government will maintain an open-door policy and the industry will always have an opportunity to influence policies, and Government will not do something to surprise investors,” he said


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