Zambia to Boost Power Capacity 39% in 2014 to Support Mines

Feb 06, 2014 9:04 am ET

(Updates with copper price in final paragraph.)

Feb. 6 (Bloomberg) -- Zambia will commission power projects this year that will boost generation capacity in Africa’s biggest copper producer by about 39 percent, Mines and Energy Minister Christopher Yaluma said.

The landlocked nation has an electricity shortage and needs to increase supply to mines that will raise output of the metal to more than 1 million metric tons in 2015 from 760,000 tons last year. Companies including First Quantum Minerals Ltd., Vedanta Resources Plc and Glencore Xstrata Plc have expansions projects under way, and these will draw more power.

“The mining industry cannot grow to the next step of making a significant contribution to economic development if the necessary infrastructure is not in place,” Yaluma said yesterday in a speech at the Investing in African Mining Indaba in Cape Town.

Zambia will start producing 80 megawatts from the Kariba North Bank hydropower plant extension this month, after the project added 280 megawatts in November, Yaluma said. One megawatt is enough capacity to power about 2,000 average European homes.

The Itezhi Tezhi project, about 200 kilometers (124 miles) west of Lusaka, the capital, will contribute 60 megawatts to the power grid by August and an equal amount by the end of the year, he said.

Kafue Gorge

The 750-megawatt Kafue Gorge Lower hydropower project will start producing electricity by 2018 to 2019 and will be an important energy source for Zambia and surrounding countries, said Yaluma.

Scheduled blackouts are common in Zambia due to a lack of investment in the industry, while demand from mines grew rapidly after the sale of state assets. More than 90 percent of its approximately 2,000 megawatts of generation capacity comes from hydropower.

A local unit of Nava Bharat Singapore Pte Ltd. is building a 300 megawatt coal-fired power plant in southern Zambia, which will start producing electricity by the end of the year.

Zambia will also complete a review of its mining legislation by the end of the year, in a bid to “make the investment climate more conducive,” said Yaluma.

Copper for delivery in three months climbed 0.3 percent to $7,058.75 a metric ton at 1:50 p.m. in London. The metal’s price has declined 11 percent since the start of 2013.

--Editors: Ana Monteiro, Dylan Griffiths, Karl Maier