$145M KCM DEBT CHOKES CEC
DEBT owed by Konkola Copper Mines (KCM) to the Copperbelt Energy Corporation (CEC) for power consumed has escalated to US$145 million, posing the largest business risk for the power company.
CEC Chief Executive Officer, Owen Silavwe said in his presentation at the virtual annual general meeting that KCM debt to CEC stood at $145m at May 2020 and remained unpaid to date.
“KCM continues to run away from its contractual obligation to settle the debt. CEC continues to seek all options available to get KCM to pay,” he said.
He complained that despite the initial legal commitment by KCM and the provisional liquidator to pay for power consumed, KCM continued to default on payment obligations.
Mr Silavwe noted that the non-payment had become the largest business risk for the CEC.
“While a one-off payment arrangement was agreed towards year end to settle part of the debt, non-payment generally continued in 2020 culminating in a debt of US$145m by May 2020,” he said. Mr Silavwe said the first round of negotiations for a new agreement between CEC and Zesco that started in February had failed by March 30, 2020
He explained that efforts to resolve the impasse were yet to yield positive results as parties had continued trading on disputed terms.
“Above developments are a threat to the continuing viability of the business. It is noted that no similar decision has been made on the nation- wide Zesco infrastructure,” Mr Silavwe said.