Zambian President Edgar Lungu has told Glencore’s Mopani Copper Mines (MCM) unit to accept higher electricity prices caused by the removal of state energy subsidies, his spokesman said on Saturday.
Copperbelt Energy Corp. (CEC), which buys power from the state-owned electricity company and sells it to mines, slashed the supply to Mopani to 94 MW from 130 MW following a dispute over the new tariffs.
Mopani said on Friday the power supply restrictions had put its investments at risk, and has warned that it might lay off 4,700 staff as a result of the cuts.
Presidential spokesman Amos Chanda questioned Mopani’s decision to contest the higher tariffs, saying all other mining companies had accepted them.
“We do not have problems with any other mining company other than Mopani and they are mining the same copper,” he told reporters, calling Mopani’s jobs warning unacceptable.
Chanda said the government remained committed to the removal of fuel and electricity subsidies: “If those reforms have been accepted in the consumer sector by the poor, the president expects all sectors of the economy have to accept the reforms.”
The government in April announced a proposal introducing a flat tariff of 9.30 U.S. cents/kilowatt hour (kWh) backdated to January for mining companies, instead of individually negotiated rates that have averaged 6 U.S. cents/kWh.
Negotiations over the proposed higher tariffs involving the government, power suppliers and mining companies have been going on since November last year.
Mopani has a total workforce of 15,000 employees and produced 129,000 tonnes of finished copper in the year ended December 2016.
Reporting by Chris Mfula; Editing by Helen Popper