Copperbelt Energy Corporation Plc (CEC) has welcomed the discharge by the Lusaka High Court of the interim injunction granted on 3rd June 2020 to ZESCO and Konkola Copper Mines (KCM) against CEC following a joint ex-parte application by the two parties.
In a statement issued to Money FM News, Corporation Managing Director Owen Silavwe said following the expiry of the power supply agreement between KCM and CEC, KCM contracted to be supplied by ZESCO using CEC’s transmission and distribution infrastructure.
Mr. Silavwe explained that CEC has always held the view that commercial agreements should be honored and respected in the interest of all businesses, their investors and all other stakeholders.
“We reiterate that the parties should engage in constructive dialogue to resolve these matters and remain expectant that KCM will come to the table with workable solutions on the discharge of their outstanding USD144.7 million debt to CEC.”
“It is also important that firm agreements underpinning transactions in both the energy and mining industries should be in place for the proper functioning of the sectors and entities, and to engender certainty for commercial decisions,” Mr. Silavwe said.
Mr. Silavwe added that the Corporation takes special note of the two rulings and therefore remains desirous to see all the parties seize the opportunity to commit to an engagement process in good faith to enable equitable resolution of all the contentious matters in the shortest time possible.
“The ruling follows the dismissal by the Kitwe High Court, on 31 July 2020, of the interim injunction brought by KCM against CEC to restrain the Company’s then intended restriction of power to KCM for failure to pay its outstanding debt to CEC for power it was supplied and consumed.”
“CEC commenced the process of discontinuing power provision to KCM following multiple attempts to resolve KCM’s outstanding debt in unpaid electricity charges, which stood at USD144.7 million on 31st May 2020 when the contract between the parties expired. KCM made no attempt to settle its debts since December 2019 and, therefore, left CEC no choice but to protect its commercial rights and preserve the value of its business.”
And CEC Senior Manager Corporate Communication Chama Nsabika said the Corporation notified KCM on multiple occasions that their power would be restricted if they failed to settle their electricity bills.
Ms. Nsabika stated that according to Clause 13 (d) of the Power Supply Agreement between the two parties, CEC had the right to suspend power supply if the debt remained unpaid in excess of 45 days as KCM made the last payment to CEC in December 2019.
“The restrictions took place on 1 June 2020, one day after the Power Supply Agreement between the two parties had lapsed. As the recent court ruling has now shown, there was no evidence of irreparable damage to the mines.”
“The restrictions maintained a minimal supply of power to the mines at all times and was coordinated with the KCM technical teams in advance in order to protect both people and assets. The restrictions lasted for a few hours until government representatives asked CEC to renew full power,” she said.
ZESCO and KCM applied to the court for an order of interim injunction to restrain CEC from interfering in a power supply arrangement between them by restricting power to KCM.