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.

Stockwatch Daily - - FRONT PAGE - Mr. G. Clive Ne­wall re­ports

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

(FM) Shares: 689,379,568

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