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Zambia scrambles for electricity

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Zambia scrambles for electricity
Zambia’s power grid is under severe pressure as the impact of a prolonged drought starts biting. Most of Zambia electricity is generated by hydropower, using water from the Zambezi and Kafue Rivers. Image credit: Leon Louw for WhyAfrica

Zambia scrambles for electricity

The impact of Zambia’s energy crisis on copper production will be significant.

By Leon Louw owner of WhyAfrica and editor of the WhyAfrica magazine  

More than 80% of Zambia’s electricity is generated by hydropower produced mainly from Kariba North Bank, Kafue Gorge and Victoria Falls power stations located on the banks of the Zambezi and Kafue rivers.

The recent drought and high temperatures have caused a drop in dam and reservoir levels which has forced state-owned power company, the Zambian Electricity Supply Commission (Zesco), to cut electricity to its retail customers with for more than eight hours per day.

In response to reduced water levels in the Kafue River and Zambezi basins, Zesco announced a comprehensive power management plan.

This plan involves a targeted reduction in power generation across the country by a total of 700MW to mitigate the impact of the drought on the nation’s power supply.

The water storage in Kariba dam is nearing critically low levels, and with no significant rainfall expected in the coming winter months, the situation seems to be dire. Electricity from Kariba Dam can only be generated when the water level stands at 475.5 metres.

Zesco projects that the drought and generation challenges will lead to a substantial power deficit with severe consequences for the whole economy, but especially for the mining sector.

After a National Emergency was declared by the Zambian president earlier this year, Zesco began a series of consultations on a bilateral basis with Zambia’s mining companies.

Zesco’s mining plan (Zambia scrambles for electricity)

During these consultations, Zesco revealed a plan to reduce power supply to the mining sector by a total of 150MW from May 2024 to December 2024.

Power shortages earlier this year have already had an impact on mining output, with Nonferrous Metal Mining Corp’s Chambishi facilities cutting production with more than one-fifth. The company is considering plans to install diesel generators at the plant to help alleviate the impact of power shortages.

The plant, which produces about 250,000 tons of copper per year, is one of the biggest processing facilities in Zambia. But its capacity has been badly hit by power cuts because of Zesco’s capacity constraints.

The impact on First Quantum (Zambia scrambles for electricity)

Meanwhile copper giant First Quantum announced that its combined operations are expected to have its power curtailed by approximately 80MW over this period.

First Quantum says in a statement that it had received a force majeure notice from Zesco last month to formalise their request for power reductions. This procedural step will allow First Quantum to secure power independently from alternative sources.

The company states in a press release yesterday that it is in the process of finalising binding offtake agreements with third party traders for power sourced from the Southern African Power Pool for a total of 80MW currently, which may be expanded if forecasts of power reductions in Zambia change.

These vendors are securing the necessary power required by the Company’s Zambian operations from Mozambique’s Electricidade de Moçambique and Namibia’s NamPower. The Company estimates that impact of sourcing of power from these other sources would be USD25 million for the remainder of the year, approximately USD0.03 per lb impact on cash costs.

First Quantum has also signed a letter of intent with Zesco to support improved power quality across the national grid. Under the terms of the arrangement, First Quantum will provide upfront funding for Zesco to install Static VAR Compensator units which are expected to improve the quality and availability of power on the national grid.

First Quantum is also advancing a 430MW of solar and wind project with TotalEnergies and Chariot Energy. The expected commissioning date of the solar and wind component is 2026 and 2027, respectively.

Furthermore, the company is in advanced discussions with Zambian hydro scheme project developers with sites in Northwest and Northern Provinces of Zambia. The combined baseload power of these projects is 50MW. These sites have more favourable hydrology than Zambia’s south, where most of Zambia’s current generation are located.

At this stage, based on current power supply and demand forecasts, the company anticipates that it will be able to substitute the power curtailed by Zesco with imports, thereby avoiding any major interruptions to its Zambian operations.

It is expected that operations at smaller copper producers across the country will be severely affected by the current energy crisis in Zambia.

Zambia scrambles for electricity

Zambia scrambles for electricity
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Zambia scrambles for electricity

 

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