Govt. hikes electricity prices for mining companies

January 30, 2016 9:33 AM

Mining companies operating in Zambia include Glencore, Canada's First Quantum Minerals, Vedanta Resources and Barrick Gold.

Mine workers are pictured at the Freda Rebecca gold mine in Bindura town February 7, 2015. REUTERS/Philimon Bulawayo

Zambia increased the price of electricity for mining companies by 26 percent this year as Africa's second-largest copper producer seeks to attract investment in power generation, mining industry sources said.

The ministry of energy told mining companies they will pay 10.35 U.S. cents per kilowatt hour from January 1, up from 8.20 cents per kilowatt hour previously, one mining industry source told Reuters.

"This would have been acceptable if it only applied to emergency power imports but, as it is, some mining companies may be forced to shut down some processing plants," a second industry source said.

Energy minister Dora Siliya declined to comment.

Mining companies operating in Zambia include Glencore, Canada's First Quantum Minerals, Vedanta Resources and Barrick Gold.

Zambia's government said in December it was talking to mining firms about increasing tariffs to meet the rising cost of electricity.

The World Bank has recommended Zambia charge mining companies higher electricity tariffs to attract investment in power generation.