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images.jpgBy Shapi Shacinda

LUSAKA (Reuters) – Thirty foreign and local companies have tendered for shares in Zambia’s major coal supplier to its copper mines, a senior industry official said on Wednesday.

Joseph Chikolwa, chief executive officer of ZCCM Investments Holdings, which wholly owns the Maamba Collieries Ltd mine, said tenders would close on March 28.

“We do not have a fixed percentage to give to the successful bidder but we have decided to leave it open for negotiation with the successful bidder depending on the value they are going to add to Maamba Collieries,” Chikolwa told Reuters.

“In terms of the response, we have had over thirty interested parties expressing interest to submit proposals so we can say the response has been very good.”

He declined to name the companies.

ZCCM Investment Holdings (ZCCM-IH) plans to inject $12 million into operations of the Maamba Collieries Ltd. as it seeks permanent equity partners.

Maamba produced about 600,000 tonnes of coal per year in the 1980s, but years of undercapitalisation have led to a fall in production.

Maamba mine has seen production slump in recent years due to undercapitalization and operational losses.

The companies also hope to invest in construction of a 300-350 megawatt station to power the facility, said Chikolwa.

Power demand in the southern African country has been boosted by several new mines and industrial plants.

Maamba Collieries has 78 million known coal reserves to last over 70 years while the coal mine has capacity to produce up to one million tones of coal per year, officials say.

“The coal at Maamba can be used to help solve the power deficit the country and the (southern Africa) region is currently facing,” said Chikolwa.

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Tue 18 Mar 2008, 13:11 GMT
lpm.jpgLUSAKA (Reuters) – Zambia will construct a new coal-fired power station and scrap import duty for power-saving electric appliances in a bid to alleviate power shortages at copper mines, President Levy Mwanawasa said.
Mwanawasa said in remarks on state television late on Monday that he had instructed his finance minister to scrap and suspend some taxes on imported electrical appliances that use less power.

Zambia charges a maximum of 25 percent import duty and 16 percent value added tax (VAT) on various imported items.

“The government is looking at encouraging coal based electricity generation using the Maamba Coal Mine…but it will take many years for these efforts to produce increased capacity,” Mwanawasa said.

Officials say Maamba Collieries has coal reserves of around 78 million tonnes which can last for over 70 years.

Mwanawasa said Zambia will introduce cost-saving measures to encourage domestic users to trim consumption to enable state power utility Zesco provide adequate electricity to the copper mines, the country’s economic lifeblood.

Mwanawasa said power demand has been boosted by several new mines and industrial plants, among them the Lumwana copper mine, which is due to start producing 165,000 tonnes of copper per year in 2009 and a new nickel mine in southern Zambia.

Zesco data shows that it generates up to 1,000 MW of power compared to total national demand of 1,600 MW during peak hours from 6 a.m. to 6 p.m. Demand is expected to rise to 2,500 MW in the next five years.

Mwanawasa said Zesco had switched off ageing power generators for renovation in a bid to have increased capacity by March 2009.

“While this will help, I am afraid to say the overall supply-demand balance will remain tight because new sources of demand for energy have emerged and will continue to emerge,” he said.

Zesco has said it requires $2 billion in new power investments to meet national demand.