ARM and Vale sell Lubambe mine in Zambia
AFRICAN Rainbow Minerals (ARM) and Vale South Africa have disposed their 80 percent stake in the Lubambe copper mine in Zambia to private equity manager ERM Capital for $97.10 million.
ERM chief executive Jason Chang said they bought the Lubambe stake as they believed that this mine offered quality and growth potential which would enhance its copper portfolio.
Zambian copper miners have been in a bind over power supplies, with power supplies reduced as the country battled power deficits that have disrupted economic productivity.
First Quantum said on Wednesday that “power supply to the Kansanshi complex and Sentinel mine had been reduced by 15 percent and 29 percent respectively.
The company said it had written to the government to negotiate a payment plan. However, reports quoted government officials saying First Quantum had refused to pay the new power charge.
“By letters dated June 29 and August 4, 2017, the company agreed to pay approximately $0.09 (R1.19) per kW/h for both operations, conditional on the state-run power company allowing it to source 200 megawatts of power from other suppliers,” it said.
First Quantum has now offered to “build more capacity in the interconnector from Zimbabwe to Livingstone” in Zambia. Mining for Zambia, an initiative of the chamber of mines of Zambia, said yesterday that mines in Zambia consume around 55 percent of power generated in the country.
“The Zambia Electricity Supply Company’s precarious financial situation is also linked to the fact that it does not appear to be an efficiently run organisation,” said Mining for Zambia.
Zambian Finance Minister Felix Mutati said in his 2017 budget speech that cost-reflective tariffs should not mean that consumers should end up paying for inefficiency. He also said that there was need to “improve both technical and commercial efficiency in the electricity supply industry”.