THE stand-off between Mopani Copper Mines (MCM) and Copperbelt Energy Corporation (CEC) is certainly getting out of hand.
The stand-off over the supply of power by CEC to MCM is affecting copper production, the mainstay of Zambia’s economy.
For over a week, the tug-of-war over electricity tariffs has worried the nation. The stand-off between MCM and CEC is certainly unhealthy economically for the country and for the miners and their dependents.
It is extremely unhealthy because for the mining industry, the stand-off comes at a particularly bad time – just when the prices of copper are very high on the international market.
As if the loss of the much-needed foreign exchange arising from lack of production is not enough, MCM has touched on a raw nerve by announcing plans to scale-down operations, which would see 4,700 workers retrenched due to the continued restriction of power supply by the CEC.
The country never knew that power pricing and supply agreements could be so contentious to an extent of leading to the current scenario where MCM is now threatening to retrench workers if the company does not get “preferential treatment”.
What is surprising is that corporates that are in business and mint millions of dollars from the export of copper want preferential treatment, which ordinary Zambians are not enjoying.
Citizens are obediently and through sacrifice paying cost reflective electricity charges.
Even if MCM has a good case for preferential treatment ostensibly bound by an agreement between them and the electricity supplier, the mining company should not rush into threatening to curtail some areas of operation due to power restrictions.
It seems the company now wants sympathy from the public perhaps to help pressure for an outcome that is skewed.
Understandably, agreements must be respected but when there are significant changes in the environment in which organisations operate, there is need to appropriately change.
As the case is now, the cost of power has significantly gone up, not only for the mines and others in the production sector, but also for consumers such as households.
No-one wants the mines to collapse, but neither should anyone want to see lopsided cost sharing. It is good, therefore, that the two parties have agreed to take the mediation route.
We urge MCM and CEC to expedite the mediation process and to refrain from issuing statements that are real or perceived arm-twisting gimmicks. Both sides have able managers who should surely resolve this matter without further damage to respective entities and those that they employ.
This dispute MCM has with CEC should also serve as a lesson for Zambia to be more thorough in the kinds of deals they get into and on their business models.
Big corporates like MCM, for instance should be in the forefront in diversifying their sources of energy by embarking on power generation to sustain some of its operations.
Companies like Maamba Mine and the cement producers, Dangote and Lafarge, have some fair measure of self-sufficiency in electricity supply. With middlemen cut out of the equation, they can determine their own costs for power and be assured of continued production.
For now, let Mopani and CEC expediently work out a win-win solution.