Zambia, the second-largest copper producer in Africa, has requested its mining companies increase their power-saving measures to 40% of their usual consumption due to a severe drought that has significantly reduced hydroelectric power generation, Bloomberg reported on Friday.
Zesco, the national power utility, has asked mining operators to increase their power-saving measures or procure their own emergency power starting this month. First Quantum Minerals, which is responsible for more than half of Zambia’s copper output, relayed this information to the media outlet.
Anthony Mukutuma, Country Director for First Quantum, reportedly stated that the company has managed to meet over half of its regular power needs primarily through imports, easing the burden on other mining operations to about 35%. It is also taking proactive steps to ensure stability for the rest of the year, Mukutuma said, noting that they are sourcing emergency electricity from Namibia and Mozambique.
Mukutuma also mentioned that relying on more expensive power sources will increase the company’s basic cash costs by an average of $0.06 per pound of copper throughout 2024, which is twice the impact experienced in April.
Copper is vital to Zambia, generating approximately 70% of its export earnings, according to Fitch Ratings. Consequently, the government has aimed to protect the mining sector from the power crisis. However, residential users face daily power cuts due to the drought.
Sokwani Chilembo, CEO at the Zambia Chamber of Mines, reportedly indicated that cooperation between the government and the mining industry has helped maintain stable production so far, adding that power imports from neighboring countries have been crucial in preventing major disruptions.
First Quantum is also supporting initiatives for private power companies to develop renewable energy projects in Zambia. The company plans to finalize a power-purchase agreement with a group, including TotalEnergies SE, for wind and solar energy projects expected to generate a combined 430 megawatts by late 2027, Mukutuma said.
Additionally, the company is looking to partner with developers of 50 megawatts of hydropower projects in other regions of Zambia to diversify risks, Mukutuma noted.
However, Zambia is not going to simply limit energy consumption — it is building new enterprises for its production. Last week, Zambia's Maamba Collieries Limited announced plans to construct a 300 MW coal-fired power plant over a two-year period, beginning in August. Additionally, the company has obtained financing from principal lenders to support the construction of the plant.