Stockbrokers Zambia limited has warned that the recent developments between Copperbelt Energy Corporation – CEC and Konkola Copper Mines – KCM may have a material effect on the price of the Company’s securities and shareholders hence advised to exercise caution when dealing in the Company’s securities.
In a statement made available to the Zambian Business Times – ZBT, CEC company secretary Julia Chaila stated that the combination of these developments may have an effect on CEC’s securities and shareholders.
Chaila stated that “the CEC Board of Directors has since informed shareholders and the market that the Power Supply Agreement (“PSA”) between CEC and Konkola Copper Mines Plc – KCM came to an end on 31 March 2020 but was extended, through mutual agreement of the parties, to 31 May 2020. Consequently, effective 1 June 2020, there is no contractual basis upon which CEC can continue to supply electricity to KCM”.
Chaila further said that the market is further advised that KCM has accumulated a US$145 million debt to CEC in unpaid power charges representing twelve (12) months of consumption, which remained unresolved at expiry of the PSA.
“Further, on 29 May 2020, KCM notified CEC that they had signed a term sheet for power supply with ZESCO Limited (“ZESCO”). The same day, the Government of the Republic of Zambia issued Statutory Instrument No. 57 of 2020 declaring CEC transmission and distribution infrastructure as “Common Carrier” to enable ZESCO distribute or wheel power through the CEC infrastructure to supply KCM”.
“Subsequently, on 31 May 2020, the Energy Regulation Board – ERB set a wheeling tariff equivalent to about 30% of CEC’s current network tariff,” She added. CEC is listed on the Lusaka Securities exchange – LuSE.
