(Provides minister detail, KCM assertion)
LUSAKA, Would possibly doubtless perchance doubtless 31 (Reuters) – Zambia’s Copperbelt Energy Corp (CEC) will cease supplying energy to Vedanta’s native unit Konkola Copper Mines (KCM) from Monday, it said after talks on an extension to their supply agreement broke down over debt owed to CEC.
Zambia’s Energy Minister Mathew Nhkuwa told Reuters that KCM would now obtain its energy straight some distance from assert-owned utility Zesco, which has previously bought electricity to CEC for onward supply to KCM.
Nkhuwa said the bulk electricity supply agreement between Zesco and CEC, which expired on March 31, would no longer be renewed.
The energy supply agreement between CEC and KCM also got here to an pause on March 31 and became prolonged through mutual agreement most attention-grabbing as some distance as Would possibly doubtless perchance doubtless 31, CEC said in a press delivery on Sunday. KCM owes the energy company $132 million, CEC said.
“Negotiations for its extra extension absorb broken down, no matter CEC’s most attention-grabbing efforts in correct faith in the direction of securing a brand quiet contract,” the assertion said.
A KCM assertion assertion said that, after the expiry of its contract with CEC, the company had entered into but one more agreement with Zesco, effective June 1.
“We question a seamless transition within the provision of energy from CEC to Zesco and any interference or restriction will doubtless be an act of sabotage,” KCM said.
In attempting to agree the quiet contract, CEC sought to resolve KCM’s prominent $132 million debt and also manufacture a agency commitment from KCM on timely rate of future electricity costs, it said.
CEC said it had told KCM that its supply will doubtless be discontinued, adding that this became the most attention-grabbing option accessible after the failed talks.
“Due care has been taken to variety sure that the way of discontinuing supply ensures the security of personnel and tools and preserves the integrity of the mine,” CEC said.
India’s Vedanta owns about 80% of KCM.
Whereas Zesco will now transport energy to KCM, this can calm trot through CEC energy lines. Nkhuwa said that CEC will most doubtless be breaking the legislation if it refused to transport the flexibility.
“I issued a statutory instrument on Friday, declaring the CEC lines a standard carrier. CEC is subsequently obliged to transport the flexibility from Zesco to KCM at a rate,” Nkhuwa said. (Reporting by Chris Mfula Editing by Susan Fenton and David Goodman)