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For several months, Zambia, Africa’s second-largest copper producer, has been facing a major challenge: energy shortages caused by a historic drought. This situation has forced copper producers, such as Canada’s First Quantum, to import part of their electricity consumption, which has a direct impact on production costs.
First Quantum recently announced that copper production costs in Zambia will increase by $0.06 per pound for the remainder of the year due to energy shortages. This increase is double the initial forecast of $0.03 per pound, or $25 million. This information was communicated in the company’s second quarter balance sheet released on July 24.
Zambia is currently experiencing an unprecedented drought, which has severely affected the country’s main energy source, hydroelectric power. In June, the national power company announced a 40% reduction in energy supply to mining companies. To make up for this shortfall, First Quantum now imports 193 megawatts of electricity, thus meeting 52% of its maximum energy needs.
Despite these energy challenges, First Quantum managed to increase copper production slightly in the second quarter, from 93,698 tonnes in the first quarter of 2024 to 95,102 tonnes. The company, which operates the Kansanshi and Sentinel mines, targets a combined production of 400,000 tonnes. Zambia copper production in 2024.
This situation highlights the growing challenges facing Zambian copper producers. In the long term, reliance on electricity imports could have a significant impact on production costs. Securing sustainable solutions for energy supply is essential to maintaining the competitiveness of Zambia’s mining industry.
Keep in mind that Zambia occupies a strategic position as Africa’s second-largest copper producer. The copper industry is a key pillar of the Zambian economy, and any energy disruptions can have a significant impact on the country’s entire mining and economic sectors.
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