First Quantum agrees to tariff increase at Zambian ops
First Quantum Minerals Ltd. has agreed to a tariff increase to nine U.S. cents per kilowatt-hour for its Kansanshi complex and Sentinel mine in Zambia.
FIRST QUANTUM Minerals Ltd. has provided the following update on its Kansanshi complex and Sentinel mine in Zambia (in U.S. dollars, except where noted otherwise).
• The four-week scheduled maintenance of the Kansanshi smelter was completed within the planned time period. The staged restart and ramp-up process were initiated on Sept. 12. Steady-state operations are expected during the week beginning Sept. 18, 2017.
• Unrestricted power is now being provided to the company’s operations.
• An agreement has been reached between ZESCO (the state-run power company), the government of the Republic of Zambia and First Quantum whereby:
• First Quantum agrees to a tariff increase, to approximately nine cents per kilowatt-hour, provided that Kansanshi and Sentinel can each import a portion of their total power requirements from alternative suppliers.
• The tariff increase will be implemented in two increments, with the first commencing immediately and the second being applied once the details of power import arrangements are agreed and formalized by contract.
• The tariff will be reviewed upon finalization of a cost of service study, which has been commissioned by the Energy Regulation Board. The study is expected to be available in early 2018.
• The tariff is backdated to January, 2017, with a portion of the arrears to be applied to improving the stability of power supplies for Kansanshi and Sentinel.
• The government and ZESCO have committed to provide continuous unrestricted supply of power to First Quantum’s operations and to facilitate the importation of power from alternative suppliers.
• Through management action, budgeted production at the Kansanshi and Sentinel mines has been maintained for the quarter to date.
Andrew Bell Adams, Paul M Brunner, Michael S Hanley, Robert J Harding, Kathleen Hogenson, Geoffrey Clive Newall, Philip K R Pascall, Peter St George
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