A lack of electricity supply is preventing the mineral rich south-eastern Katanga region in the Democratic Republic of Congo (DRC) from fully exploiting opportunities, reports Agence France-Presse (AFP).
In Katanga’s regional capital, Lubumbashi, power cuts regularly shut down the furnace at the Societe de Traitement du Terril (STL) factory that extracts cobalt, copper and zinc oxide.
The factory requires 34MW of electricity for the site’s furnace to operate at full capacity but the DCR’s national power company SNEL is only supplying 24MW.
Electricity supply undermining operations
The mining sector in the DRC had been enjoying a renaissance amid an influx of foreign investors and high commodity prices. However, government has proposed a contested reform of the mining code involving higher taxes for foreign investors that experts in the sector warn will further slow activity already stymied by the electricity supply shortage.
Jean-Pol Tavernier, STL’s maintenance director explained that: "Electricity supply began to become a problem during the mining boom of 2006/07.It kept on getting worse until becoming really catastrophic in 2012."
The lack of electricity supply has forced Chinese company CDM to cut 300 jobs.
Akili Peter , CDM’s director in Katanga said: "We can’t work with the little power we have. This is what forced us to shut down the four furnaces and lay off all those people working with us."
Aging infrastructure and lack of maintenance
The mining sector lacks about 60MW of electricity supply, according to Ben Munanga, director of energy and infrastructure at the Kazakh group ENRC, and who deals with mining energy issues on the country’s chamber of business.
The age and poor maintenance of its power stations prevent SNEL from meeting electricity demands. However, head of SNELs grid in Katanga, Jean Marie Mutombo Ngoie, said the problem was temporary.
"We think within a year we’ll be able to increase power," he said, citing renovation of power stations that serve mining firms as a reason for his optimism.
However, Munanga noted: "That [maintenance] won’t absorb all of the deficit. You need new production; that is the pressing need."
Some mining companies are installing generators, while others import electricity from Zambia — both expensive options.
The cost in lost production is steep. Copper output, which topped 1-million tonnes last year, could be increased by 250,000 to 300,000 tonnes per year with more power, Munanga told AFP.
In April the government issued a decree exonerating mining companies from customs duties and sales tax on imported electricity and foreign equipment purchased to generate power for four years.
While mining firms appreciate the gesture, one executive said wryly this showed "they don’t have any real solution during the next four years".