[miningmx.com] – THE onset of summer rain in Zambia would enable First Quantum Minerals to operate its Kansanshi and Sentinel operations at full capacity – a development that was “a small negative for copper”, said Goldman Sachs.
Clive Newell, president of Toronto-listed First Quantum, said in an announcement on January 26 that its operations were being “… consistently provided a total of approximately 285MW” after water levels from the catchment area that typically makes its way into the Kariba dam were being recharged.
Water levels in Lake Kariba, from which Zambia and Zimbabwe source their hydroelectric power, had dropped to 12% of capacity, said Reuters on January 20 citing the Zambezi River Authority which manages the lake’s water.
This compares to 53% levels a year ago and raised the prospect of further power shortages in the southern African countries, said the newswire.
Newell also said that in addition to evidence of rains easing the power crisis, new power capacity had also been created from thermal coal power stations to the tune of some 300MW which, combined with new hydroelectric capacity, would see a further 420MW in Zambia become available this year.
“Currently, the state-run power company is importing power from neighboring countries, and has announced additional power imports of up to 300MW from another utility … and a further 200MW from an independent power producer,” said Newell.
“First Quantum’s Zambian operations, the Kansanshi mine, smelter and the Sentinel project, are being consistently provided a total of approximately 285MW. This allows for normal operations at the Kansanshi mine and smelter complex and for Sentinel to achieve above nameplate capacity throughput for periods,” he said.
“Confirmation of power stability for First Quantum’s Zambian operations will calm nerves for now and is a small negative for copper but the real test will be during the summer months unless the company can make alternative arrangement for power at competitive prices,” said Goldman Sachs in a note.
First Quantum said last year that it would cut 730 jobs at its recently commissioned Sentinel mine owing to power shortages.
