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Efficient electricity costs vital in reforming Zambia power sector

LUSAKA Zambia (Xinhua) -- The Zambia Chamber of Mines said on Thursday that knowing the true cost of producing electricity efficiently is the first step in having cost-reflective tariffs.

“Zambia needs a revitalized, reformed power sector able to deliver cost-efficient, competitively priced electricity to grow the economy, employment and disposable incomes,” Nathan Chishimba, the president of the association, which represents mining firms in the country, told reporters during a media briefing.

“At present, the cost of producing electricity in Zambia is not known, as the last study done for Zesco (power utility) was ten years ago, in 2007,” he added.

According to him, competitively priced electricity is important for a developing country like Zambia in order to help the mining industry generate the much needed jobs.

The mining firms, he said, were concerned about electricity costs, adding that proposed tariffs at new power projects were more than 20 percent above global benchmarks.

This means that the country’s electricity was not being produced efficiently by global standard, he added.

He went on to state that the mining industry has never shied away from the reality of cost-reflective tariffs but noted that the sector was committed to tariffs that reflected the cost of providing electricity in an efficient, transparent and internationally competitive manner.

The industry has since welcomed plans to a new study on the cost of producing electricity in Zambia later this year to be funded by the African Development Bank (AfDB).

Meanwhile, the official said it would be unjustifiable for people to demand that mining firms invest in their own power plants because of the declining grades of copper and the lifespan of most of the old mines.

He however said new greenfield investments could consider investing in their own power plants.

The mining sector consumes about 50 percent of Zambia’s electricity.



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