The CEC feels it is assured its shareholders and all stakeholders that it will do its best to ensure that any agreement it enters into is negotiated in good faith and reflects a fair outcome to ensure that the transaction continues as a current entity. Zambian Energy Minister Mathew Nhkuwa told Reuters that KCM would now source directly from state-run energy supplier Zesco, which previously sold electricity to CEC and delivered it to KCM. “We expect a smooth transition in the power supply from CEC to Zesco and any interference or restriction will be an act of sabotage,” KCM said. A 20-year contract between CEC and KCM, which operates Zambia`s largest copper plant, Nchanga, as well as the Konkola and Nchanga mines, expired on 31 March. It was extended by mutual agreement until 31 May, after… The electricity supply agreement between the CEC and KCM was also withdrawn on 31 March and was extended by mutual agreement until 31 May, KEK said in a statement on Sunday. KCM owes US$132 million to the energy company, the CEC said. Over the past seven weeks, KEK and a team from the Republic of Zambia (“GRZ”), of which ZESCO was a member, have begun negotiations for a new electricity supply agreement. While the original agreement was that the parties would work to reach an interim agreement, it became clear during the negotiations that the intention was to agree on an entirely new agreement with totally different conditions. The CEC believes that it has maintained in good faith, throughout the negotiations, the end of the rapprochement with the negotiations.
At the end of the day of March 31, 2020, the parties were unable to agree because of certain conditions considered by both parties to be essential requirements and which, until now, are not acceptable to any of the parties. For its part, the CEC was faced with certain conditions required by the GRZ team, which, if accepted, would adversely affect the CEC`s business and jeopardize its ability to continue operating as an active company. “The termination process has been ensured that the termination process ensures the safety of staff and equipment and preserves the integrity of the mine,” KEK said. “The energy sector needs the CEC as a major player that has already proven itself and only second, after Zesco, under the functional responsibility of the electricity generation, transmission, distribution and supply portfolios.