Vedanta Mulls $400 Million Zambia Plant to Power Copper Unit

LUSAKA (Capital Markets in Africa) – Vedanta Resources Plc is considering building a 300-megawatt coal-fired power plant for as much as $400 million in Zambia, where it’s copper unit is the biggest consumer of electricity.

The company decided last week to also study the construction of a hydroelectric plant because its Konkola Copper Mines unit pumps 350 million liters (94 million gallons) of water daily, Deshnee Naidoo, chief executive officer of the company’s Africa base-metals unit, said in an interview Monday in the capital, Lusaka. It will take a decision in the next six to nine months, she said.

Zambia is Africa’s second-biggest copper producer and Copperbelt Energy Corp. supplies most mines with power. Konkola’s contract with CEC ends in 2020, which could see the Vedanta unit have to pay much more for electricity.

“I’ve looked at the terms of which we actually purchase power from CEC and I think there are a few things that we can renegotiate there,” said Naidoo, adding that the company currently needs capacity of 205 megawatts. “Given the fact that Zambia remains an energy-constrained country, if KCM becomes a more independent power producer, I think the country would actually welcome that. The whole power structure and tariff structure in Zambia needs to be relooked at.”

Mining companies in Zambia, including Glencore Plc and Vedanta, have benefited from an increased power supply after a shortage forced them to reduce usage in 2015 and 2016 as copper prices fell.

Source: Bloomberg Business News