Power shortage makes a bad Mining situation worse

By Brenda Zulu

The power shortage in Zambia has made a bad situation worse by placing additional constraints on the mining industry, says Nathan Chishimba, president of the Chamber of Mines.

Amplifying a key point made in his media presentation in Lusaka on 16^th December, he says this makes Zambian mines even less competitive in the present crisis relative to their counterparts in other copper-producing countries.

“In all countries, mining is a very energy-intensive business, requiring steady and reliable supply to ensure that equipment and machinery is operated efficiently, and that the safety of workers is not compromised.”

The main effect of the power shortage has been to force mines to operate at reduced capacity. This results not just in lower production, but idled workers and lower productivity. Meanwhile, mines have fixed costs, which have to be met.

Emergency power has to be sourced – whether through generators or imports – and this is invariably more expensive than the traditional supply. In some cases, expansion plans have had to be put on hold, and operations have had to be closed or put on care and maintenance, resulting in layoffs and retrenchments.

“This is the most unfortunate aspect of the power shortage, because it adds to the pressure on jobs already caused by the global crisis and the slowdown in demand for copper,” says Chishimba.

Operationally, the net effect is to push up the costs of production, making Zambian copper even more expensive to produce.  “A low copper price and a serious power shortage are probably the worst possible combination, both for the mining industry and for the country,” says Chishimba.