(Bloomberg) — Glencore Plc’s copper unit in Zambia said a dispute over electricity fees that has already led to reduced power supply may result in the dismissal of 4,700 workers.
Copperbelt Energy Corp. lowered supplies to Mopani Copper Mines after the company refused to pay new power prices introduced by the government at the start of the year. Mopani said the fee increase wasn’t part of its agreement with Copperbelt. Mopani, which employs about 15,000 people including contractors, has notified the government of the planned job losses, Labor Minister Joyce Nonde-Simukoko said by phone.
“It has become necessary for Mopani Copper Mines to curtail some areas of its operations due to the restriction of power,” the Glencore unit said in an emailed statement on Tuesday. “We expect that we shall effectively have to close several areas and our scaled-back operations may affect a total of 4,700 direct employees.”
Zambia said it raised power prices because it needs to pay for imports and electricity from private producers. All other mining companies in Africa’s second-biggest copper producer have agreed to pay the new tariff, according to the government. First Quantum Minerals Ltd., which operates the continent’s biggest copper mine in Zambia, initially rejected the increase and had its power cut. Supplies were restored this week after it agreed to the new prices.
With reduced electricity, Mopani is losing $3 million a day, Energy Minister David Mabumba said Monday, urging the company to reach a deal with CEC, as Copperbelt Energy is also known. The company had its supplies cut to 94 megawatts from 130 megawatts.
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