Mopani Mines has announced that it will have to close several areas of its operations which may affect a total of 4,700 direct employees if power supply restrictions continue.
In a statement, Mopani says it has become necessary to curtail some areas of its operations due to the restriction of power by Copperbelt Energy Corporation.
It says the decision has been necessitated by the unilateral action by CEC to restrict power supply without notice and against the provisions of the Power Supply Agreement.
“We are operating under a Power Supply Agreement dated the 31st March 2000, that was most recently amended on the 6th March 2015, and is valid until 2040. The PSA strictly sets out the agreed tariff and increases during the contract period. The contract provides that a tariff may be increased on agreement by both parties. This was the case in 2008 when Mopani agreed to a tariff increase of 33% over and above the contractual tariff,” Mopani said.
It said the current proposed revision would result in a further increase of 54%. Within the provisions of the agreement there are clear steps to be taken in the event of an impasse on tariffs.
“These dispute resolution steps have unfortunately not been followed by CEC, which instead chose to resolve the impasse by a unilateral restriction of power supply. Efforts to compel CEC to abide by the Power Supply Agreement have unfortunately been ignored,” it said.
“We are prepared to continue to follow the process as underlined in the agreement. However, for as long as the restriction is in force, we are unable to conduct our operations safely. Mopani has some of the wettest underground copper operations in the world. Each day we have to pump 190 million litres of water to ensure the safety of our workforce. The pumping alone represents almost 25% of Mopani’s total power costs.”
It warned that without a stable supply of power, its ability to safely operate is severely hindered.
“Although we shall work on optimising the use of the limited power that we are receiving, we expect that we shall effectively have to close several areas and our scaled back operations may affect a total of 4,700 direct employees We are engaging with the Unions and other stakeholders to see how we can mitigate the effects of this unavoidable course of action,” it said.
“We have continued to negotiate with CEC and ZESCO in good faith, however without power supply to our operations, we are unable to maintain our workforce.”
“Mopani is one of the largest investors in Zambia’s mining sector, having committed over USD$ 4 billion since 2000. Since 2014, Mopani has invested over USD$1 billion in site expansions and upgrades to extend the life of mine by a further 25-30 years,” it stated.
It said this investment will help Zambia realise the full potential of its copper mining industry for decades to come, providing a secure platform for the Zambian industry to compete on a global scale.
“This investment will help secure jobs, local procurement and much needed revenues for the Zambian state. CEC’s inability to honour its agreement with Mopani puts this investment at risk.”
Meanwhile, a memo sent to all Mopani employees from Employee Relations Manager a Mr. G Mayeya had advised all affected workers to take leave.
“Further to our earlier communication on the restrict of power supply to Mopani, we would like to inform all employees that the situation has not changed as negotiations have still continued,” read the memo.
“Management is working hard to ensure that this matter is resolved within the shortest possible time as this is impacting negatively on production. While a lasting solution is being sought, Management has taken the opportunity to allow employees in the various Business Units to take leave, particularly where operations are suspended or plants are operating at minimal capacity, as a way of managing fatigue.”
“Accordingly, Business Unit Managers will work with their respective Senior Human Resources Officers to prepare leave schedules to effect leave arrangements in this respect. The implementation of these leave schedules will take effect from Monday, August 21st 2017 until further reviewed.”
The dull PF empty tins in govt will fall for this trap and continue with discount as they do not know how to play the game.
I commend MOPANI.
Who cares about lost jobs anyway? Get education your numb-heads
I hold a PhD
Thanks
BB2014,2016
Cancel their contract. Thieving mine owners.
This is a misplaced priorities by GRZ/PF. This is a national crisis and GRZ should immediately engage Mopani. We are talking about 47 Hundred worker who will soon add to a long list of families without means to put food on the table.
God bless Zambia
This PF government must have either suspended its thinking capacity, or it lacks the ability to analyze issues.
And why would a mining company have a symbol like they deal in green party things.
GRZ needs to issue an ultimatum to Maponi … they have 48 hours to resume operations or ZCCM-IH takes over the entire mine operations.
GRZ can’t be held ransom by these conmen. ZCCM-IH also needs to let them know once they take over operations they will not be under any obligation to liquidate Maponi’s stake and pay them for their stake in the company for the next 40 years; the same way they negotiated for a 40 year PSA.
GRZ also needs to increase their stake in Maponi to 49% and flood the rest to all employees through their pension scheme or invite the national pension houses to invest with them.
Maponi has a 48 hour timeframe to decide to walk away from their $5Billion investment and wait 40 years for a payback to fall in line. The choice is theirs … have had a tax…
Continued…
Maponi has a 48 hour timeframe to decide to walk away from their $5Billion investment and wait 40 years for a payback or fall in line. The choice is theirs … have had a tax holiday for far too long and now they want to hold everyone ransom?
Babepelefye!!!
Mopani if they so wish can pack their bags and leave! They are in the same group as the likes of Anglo America and the Greg Mills of this world!
Mopani are jokers from South Africa hat belong to the same group aas Greg Mills and they can’t hold the nation to ransom!
Copper price is on the rise and next month the USA begins its infrastructure construction program next month so the price will sky rocket soon! Don’t let Mopani try to cheat us!
@ JAY JAY YOU ARE PATHETIC.
YOU THINK ONLY YOUR TRIBESMEN HAVE BRAINS.
THAT IS WHY ZAMBIANS WILL NEVER ALLOW YOU AND YOUR ILK TO RULE IN ZAMBIA
BLACK MAIL FROM THESE MINING COMPANIES WILL NEVER END TILL WE FIND OTHER WAYS TO EARN FOREX AND RUN THE ECONOMY!! When a person get used to being pampered it is hard to tell them to adjust, and that how these mines are now!!THEY DONT WANT TO SHARE THE BURDEN OF BUILDING RELIABLE ENERGY INFRASTRUCTURE, THEY WANT ORDINARY PEOPLE TO CARRY THE LOAD OF HIGH TARIFFS ALONE SO THAT THEIR HUGE PROFIT MARGINS ARE PRESERVED AT THE EXPENSE OF LONG TERM INVESTMENT IN THE ENERGY SECTOR and WHEN WE FACE POWER SHORTAGES DUE TO LACK OF INVESTMENT IN POWER GENERATION THEY CLOSE SHOP AND LAY OFF WORKERS – BLACKMAILERS THEY ARE!!
If you have dull corrupt chaps as ministers…you can never move forward…they will rush to plead!!
@2.1 Jay Jay, INDEED, there is so much secrecy in the dealing with mines that we are bound to see corruption as the only reasons things are as they are!! EVEN INVESTMENT IN MINING IS LONG TERM, HOW CAN A SENSIBLE PERSON COMMIT TO A 40 years agreement when things are changing so fast these days??
Mopani says there is a contract in place which has guide lines how the increment has to be effected which CEC has ignored. And it appears that contract does not have an exist close. That is the problem of negotiating contracts blindly.
They have signed developmental agreements from Mwanawasa’s time…they keep renewing them behind our backs…so they are still paying 2002 rates
Its high time we become serious as a nation. Copper has got good price and these so called investors want to benefit alone from all this. This is total nonsense.
i humbly ask the zambian government to take hh back to chimbokaila and cage him forever. when he was in prison the kwacha appreciated, millie meal prices dropped, fuel price reduced, inflation reduced, interest rates reduced, we had a bumper harvest, the kariba dam filled up and many more. now that he is back mopani suddenly want to retrench yashani. by the way mopani is owned by hh’s freinds and cec is owned by milupi. lastly am finaly in love with mushota
Please don’t listen to these con men. They are saying it is the biggest mine in Zambia, now why do they want CEC to give them free electricity? CEC is also in business buying from ZESCO then reselling. Mopani is not serious but is very cunning and we should not listen to him. Let them pay just like others are doing. And who signed a contract of free electricity for 40 years…are we serious Zambians…How.
I support Mopani. Why should Zambians be paying 75% increases in electricity tariffs that goes to find Lungu’s stealing? I will be putting my house on 100% solar soon.
PLEASE…nationalise this mine. Go away Mopani, you can’t make profits in Zambia using cheap labour and making the citizens pay part of your costs. Why should the state subsidise you when the poor in Zambia are losing their subsidies on other fuels?
Let the 5000 miners taste their Dununa Reverse medicine for voting PF. We know that miners are too dull.
“We are operating under a Power Supply Agreement dated the 31st March 2000, that was most recently amended on the 6th March 2015, and is valid until 2040. The PSA strictly sets out the agreed tariff and increases during the contract period…”
There you have it, some clever chap put pen to paper until 2040 and when the mine holds you to that you blame MCM? CEC must just follow this agreement which they committed to however f00lish they will look. The people to blame here its CEC who agreed to whatever in that agreement. You want someone to blame for MCM getting away with most things including TAXES, blame the people who go into such agreements with them!
Zambia the land of idyots!
This is not even half as bad as what Kaponya (HH) did to the miners in the 1990s when he swindled them by privatizing the state owned mines. The man is evil in the flesh in its purest form.
Now look at this caliber of people who bought the mines holding us to ransom.
HH is not kaponya. He looks more civilised than ECL and most of his close friends.
NO BLACKMAIL. MINES HAVE TO PAY ECONOMICAL PRICES.ZESCO CAN ONLY CONTINUE SUPPLYING THAT NEEDED POWER ONLY IF ITS RECOVERING ITS COST OF PRODUCING THE POWER SUPPLIED TO THE MINES. THOSE AGREEMENTS WERE DRAWN IN CIRCUMSTANCES THAT WERE CONDUCIVE FOR SUCH AGREEMENTS TO BE MADE, BUT NOT NOW. ELECTRTICITY COSTS ALOT TO PRODUCE. NO SUBSIDY TO THE MINES!
Paying the new tariffs under special arrangement must be possible. It is a matter of using good offices of ERB in direct collaboration with Ministry of Mines and Ministry of Labor and Ministry of Energy. Sometimes negotiations are the most cost effective path. Each actor needs money but it takes time to make money. Time is money: today the money is not enough to meet energy needs but things will be better tomorrow. Negotiations are the only viable alternative.
Zambia the real Africa…How do you sign a power supply agreement over a period of 40 yrs? Even if you want to ensure a predictable and consistent policy enviroment,I think its too long a period.
CEC and North West energy are the biggest cartels in Zambia whether we agree or not! These are “middlemen” in the ZESCO electricity supply chain. If CEC can declare over 22 million USDs in dividends, that tells you a lot. Let the mines deal directly with ZESCO than buying electricity at exorbitant prices because of middlemen as if their electricity is refined. There are too many cyndicates in this country where the energy sector is concerned. These must be dealt with before we can begin to see sanity. Mines have high gearing if you know what that means. Any slight shift in operational costs has a huge impact on the operation. Solution? Chop the middleman – CEC!
If Mopani gets away with this, then we as domestic customers are not obliged to pay increased rates. We will have to rise against high tariffs. This is the mine that has never paid any profit tax, no paid dividends to the Zambian shareholder, and yet they are refusing to pay for the very electricity generated and transmitted at a high cost by a Zambian company. It is not fair
…and this is the mine hh was saying he will replace them with Anglo.
YOU’RE A FAILED INDOSHI.
Your party has failed to charge HH with any real offense. Just ka treason akafufi.
If you have facts take him to court. And no Nolle please.
These guys have been doing this crap for a long time. Electricity tariffs are the lowest in the region! Government had been subsidizing power to the mines for years and they had been getting something like $5/unit while everywhere in the region it has been $11/unit. This had been set so during the UNIP government and GRZ has attempted to change this but these guys keep on refusing. Mopani is the biggest culprit in all those who bought the mines and went on to kill Nkana Football Team too! They are good at blackmailing GRZ. The best thing government can do is to tell them to pack and go! There are so many irregularities there and they hide profits from Zambians! They can’t do this in Botswana or in Nigeria!
The only dull chap is JJ and his Namwala chief!
I am also chasing some relatives from my house because Zesco has increased its tariffs. How come other mines are paying? Mopani has always been coming up with all sorts of escape routes including avoiding giving comprehensive pensions to its employees. It took them more than ten years to start contributing to NAPSA. Those blaming the PF are either doing so out of ignorance or out of spite.
Mopani is always holding our government, our nation, our beloved country to RANSOM. Damn Capitalists!
Some people boast of PULL HER/ HIM DOWN. PHD on its own does not put food on the table. Get a life! Bill Gates is silent with his trillions made without PHD.
Call their bluff. Remember that they are also losing 3 million dollars daily and if they retrench they have to pay retrenchment packages. A sensible businessman would know that paying the correct tariff for electricity ensures long term revenue and profits, and would not want to kill the source of its energy. All other mines have agreed to pay including those with much higher production costs poorer grades, and have out in investments. Is it Mopani alone which is investing?
PAY or SELL you xrooks!
Really laughable your Lungu Lazy is not shrewd enough to play this chess game especially that he is surrounded by advisers like Kaizer whose only certificate is a Birth Certifcate.
At 18.1 please take note that its now the Zambian citizen that is demanding that MOPANI pays the correct power tariff. The government is mandated to take corrective action on behalf of its people. Its clear that the mining giant, MOPANI is upto no good. I hate the blackmail part of it especially that they are using human life as a tool.THEY MUST PAY THE CORRECT TARIFF SO THAT THE SOURCE OF POWER SO THAT ZESCO CONTINUES SUPPLYING THEM WITH POWER.THAT WAY THEY ARE ASSURED OF REVENUES. Can someone tell us what the company contributes to the TREASURY.
Mopani is just blackmailing Govnt!
If us poor Zambians are buying electricity on new tarrifs,why should mopani owners refuse?let mopani leave Zambia and other investors shall buy the mine.
President Edgar Lungu must not fear but face mopani owners head on.we cant develop with such kind of greedy investors!!!
The majority wins so let mopani go.we had Anglo-america,they went and today we have kcm.so other serious envestors shall buy mopani mines and accept new zesco tarrifs soon!!!mopani management thinks that by threatening to fire 5000 miners,PF Govnt shall fear and let them continue paying peanuts for power-NO WAY!!GO BA MOPANI IF YOU DONT WANT TO FOLLOW ZAMBIAN RULES!!
Follow Zambian rules ?
It is most likely lungu and PF got money from Mopane to campaign. And they were made to sign that contract…..
Just ask these Mopani *****s to go away whereever it is they came from.
We can’t keep living under threats by these corporates that are hell bent on raping Zambia and clearly don’t give a toss about the welfare of 5000 Zambian workers and their families.
This is pure and applied BLACK MAIL by Mopani. These Cargo carries now want to use the PIRATE way of getting things done. Dear Mopani we are not at sea. STOP THE BLACK MAIL.
The dull empty tins in opposition called UPND, like @JJ #1 have an agenda from Satan to destroy this country but Freemasons will not prevail!
Jay Jay this Jay Jay that…I have no time for slappers like you and Kampamba Mulenga!!
Iwee Sharon, cinyo chobe. This has nothing to do with UPND. If you have nothing to say close your stinking mouth which is only good for blow jobs!
Busy with a Masonic flag in a Masonic country and you trying to say Freemasons will not prevail.. Madam they prevailed some 2000 years ago.
Lungu took money for campaigns , that’s why PF signed any agreement, it seems the interest of lungu and PF were put above the country….
THe other mines are now paying the new tarrifs charged by CEC. So who is Mopani to say no. Kwasila. Lets be fair. If the rest of the mines are paying. They should too. It wont be fair the other mines if Mopani pays less than they are paying now.
@Rat Teeth
Yes I can confirm to you today that Yes, the power that CEC buys is refined before it is sold to the mines,Voltage stability is improved as well as Power Factor, When Zambia goes into a nationwide blackout, mostly it’s the infrastructure built by Cec that is used to import Power
CEC is a dedicated team of people who spend sleepless nights to ensure a continued and stable supply to the mines,which I think Zesco cannot manage with their perceived incompetence and lazy attitude
I rest my case.
I will be slammed here but if there is a contract in place since 2015 that has to be adhered to. Who in their right mind agrees to a 40year contract atva set price. You contract to buy a car on a loan andthe agreed repay js say $50 week then your lender says sorry but now i wantv $75week. There goes your budget. Figures are larger but principle is the same.
As the government reminds us constantly, rule of law is how zambia operates. A contract is a contract at law.
Dont bkame the mines blame whoever signed the 40 year contract
They probably gave PF money for campaigns that’s why anything was signed by lungu and PF….when we told you they were sellling out Zambia just to win elections, this is what we meant.
The most likely scenario ladies and get Ellen is that lungu and PF got campaign funds from mopane and just signed anything put in front of them….that dates concide with elections and no one in their right mind would sign a 40 year contract based on old tarriffs …….that is why lungu hates HH so much, he was made to sell Zambia.
You’re mad….2000 Lungu was not even on the political scene. ..blame Chiluba and Mwanawasa but unfortunately they can’t defend themselves.
Read….the contract was resigned 2015……under lungus watch after some negotiations it seems and ties in nicely with the elections….
Have you seen this contract? For once forget about Edgar and HH and think of Zambia as your country. Why should you side with people who want to rape your country just because of politics. I remember how some people celebrated when the mines retrenched employees soon after HH lost the election.
How can you forget about lungu, was a tree in charge of Zambia in 2015 when the contract was resigned ?.. ..it was lungu in charge of Zambia , he is the one who commissions all bid projects , so who do you want to blam for this lapse in accountability ?
That is the problem with you PF rats , every time something is commissioned it’s lungu ,lungu now there is a glaring problem with a contract boards ring on corruption and no one is responsible….you thieves , the whole lot of you…
More families on the streets! Pheeew!
CEC must ensure that it does not back track on new tariffs.
It’s a failed contractual obligation on the part of CEC. Blame your corrupt officials who signed the 40 year long electricity tariff structure. You are now exposed. Deal with the corrupt officials first before government deals with Mopane.
Mind you mining is a wasting resource, those investments Mopane is boasting about have probably a 40 year life span and will be depreciated by then. Mopane knows it will be out of business by then. That’s the time CEC will come and review the tariff for a profit.
The ZAMBIAN government needs to figure out how to get GLENCORE/MOPANI out of ZAMBIA. Reposes the mine or something. For using the lives of ZAMBIAN MINERS as bargaining chips they need to be punished heavily.
Remember how this same company was manipulating its copper sales until some overseas organization brought this to the public.
Get RID of Mopani.
MOPANI means ARM TWISTING. Some company mining Tanzanite started playing games after they were discovered cheating and were actually saying they would shut the business. So the host country allowed them to pack and leave but they never did. Instead they paid all the areas and to date are paying correctly. Courage is doing what you are afraid to do. Lets do it. Reposes the mine if they retrench the workers. UNION play your part and not let the GRZ do everything for you. After all you are better paid than most of those you are representing.