|Ngandwe---Chamber wants true cost of power production known|
May 24 (Zambia Informer) ----- -Mining companies in Zambia have reaffirmed their desire for an efficient, transparent and objective way of resolving the cost of power with the inclusion of all stakeholders.
The Chamber of mines, a lobby group representing local and foreign mining companies operating in Zambia says although it has been involved in the negotiations towards determining the real cost of energy in the country which started in November 2016, more needs to be done but with due regards for various fundamentals that seek the inclusion and contributions by all players to arrive at the true value.
The organization, which embraces mining and allied industries argues that it was perturbed about narratives purporting that it has been excluded from the review of power tariffs for domestic consumers in the country yet it has taken a centre stage and given its position known on the call for determining the true value power produced based on a Cost of Service Study (CoS).
However, the chamber contends that while it embraces various mining sector players, it has no mandate to negotiate power tariffs for its individual members as it has remained committed to learning how the pricing is arrived at by the service providers-Zambia Electricity Supply Corp., a need that remained unresolved.
“As an industry body, the Zambia Chamber of Mines does not and cannot negotiate power tariffs for its individual members. However, the Chamber has made its position on power pricing in Zambia categorically” Talent Ngandwe, the acting Chief executive officer says in a statement, Wednesday while reiterating its call for a foolproof process to cast away doubts.
“The position is that going forward, power pricing must of necessity be determined in a transparent, objective and efficient manner.”
The Chamber notes that while negotiations have been ongoing since last year-November with the involvement of various players, among others, Energy Regulation Board and the finance ministry and with the chamber having consulted its members based on their respective agreements made under the Bulk Power Supply Agreements (BPSA) under the auspices of providers and distributors-Copperbelt Energy Corp., (CEC), it reiterates calls for a Cost of Service Study, whose outcome will determine the basis for determining power tariffs in the country for the long term unlike the exclusion of end users.
“The question of power pricing is vital to the economic future of Zambia. Much as there is need for power to be priced at a level that adequately compensates investors in the sector, there must be a realization that this must not be to the exclusion of other sectors in the economy, of which mining is one.
There must be a balance between the efficacy of electricity pricing, and the affordability of the power produced in the country, as it suits no one to have a power industry without a market for power because no one can afford it”
Mining companies, take cognissance the critical importance of the balance being sought and is ready to abide by and ensure that the outcome remains the guiding fundamentals of all power pricing decisions in Zambia noting that mining companies consume the larger chunk.
The chamber notes, it is folly for some commentators to fuel a narrative that mines are somehow immune to current developments in the power sector. The mining sector, through the Chamber remains optimistic of a comprehensive, objective and rational debate, as promised by the ongoing Cost of Service Study.
This, should however be backed up by genuine and active interaction among all stakeholders as it remains the best solution to resolving the future of power supply in Zambia.
“This is what all stakeholders should be aiming for, and it is certainly the aim of the Zambia Chamber of Mines.” added Ngandwe.
Zambia’s power provider-Zesco has affected 75 percent power tariffs for all retail consumers with 50 percent coming into play on May 15 while 25 percent will be applied on 1 Sept.
However, it argues negotiations are underway with mining companies to arrive at an understanding on whether the company should effect the proposed US$0.933 cents a kilowatt hour effective 1 January.
The Chamber of Mines in Zambia was originally formed in September 1942 as the Northern Rhodesia Chamber of Mines. It operated until 1965 when the Copper Industry Service Bureau (CISB) replaced it.
However, with the nationalisation of the mining industry the necessity for the Chamber of Mines fell away. The Chamber of Mines was re-established in 2000 after the privatisation of the mining assets were completed.
The Objectives for which the Chamber of Mines of Zambia has been established are detailed in the Constitution and are as follows: "The Chamber is established for the purposes of promoting the interests of its members, and encouraging, protecting and fostering the Mining Industry of Zambia and doing everything necessary and advisable for the advancement /achievement of those objectives."