Vedanta Zambia power station

From Global Energy Monitor
This article is part of the CoalSwarm coverage of Zambia and coal
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Vedanta Zambia power station was a proposed 300-megawatt (MW) coal-fired power station in Zambia.

Plans for the coal plant appear shelved or cancelled.

Location

The map below shows Chililabombwe, the proposed location for the plant, at the Konkola mine.

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Background

In 2013, Konkola Copper Mines (KCM), the Zambian unit of Vedanta Resources, revealed that it was exploring for coal and may build a power plant in Zambia to reduce electricity costs. KCM, which started exploration at the prospect in the Sinazongwe district of Zambia’s southern Province that year, was considering a power station to generate as much as 300 MW. KCM was the biggest power consumer in Zambia, using as much as 250 MW – or about 13% of the country’s total generation capacity – at the time.[1]

India-based copper miner Vedanta Resources was planning to invest $300 million in a 300 megawatt (MW) coal-fired power plant.[2] The plant was planned for southern Zambia and would fuel the Konkola deep mine in Chililabombwe, as well as the setting up of a cobalt refinery and other projects.[3]

In August 2019, it was reported that the government of Zambia had accused KCM of underpayment of dividends and taxes, as well as underinvestment in the mine. The government appointed a liquidator to run the company. Vedanta was seeking to have the case referred to arbitration in South Africa.[4]

In July 2020, it was reported that Zambia’s Copperbelt Energy Corp. (CEC) would stop supplying power to Vedanta’s local unit KCM after talks on an extension to their supply agreement broke down over debt owed to CEC. KCM owed CEC US$144.7 million after failing to make any payments for power supply since the government took control of the mine in May 2019 following the protracted dispute with majority shareholder, Vedanta Resources. The government was thought to have believed it would be able to quickly sell the mine, but Vedanta withdrew cash and senior staff, threatening the mine’s ability to operate. KCM planned to receive its power directly from the utility ZESCO instead, which previously sold electricity to CEC for onward supply to KCM. Energy Minister Matthew Nkhuwa said the bulk electricity supply agreement between ZESCO and CEC would not be renewed.[5][6][7]

In 2020-21, KCM, CEC, and ZESCO were embroiled in fierce legal battles. In October 2021, ZESCO Limited and KCM (in liquidation) applied to discontinue the matter.[8] The Minister of Energy Peter Kapala also said the Government was ready to negotiate with CEC on Statutory Instrument (SI) number 57 of 2020 which was issued the previous year to declare its transmission lines as common carriers. The government was also willing to engage the energy company on the pending renewal of the Bulk Supply Agreement with ZESCO Limited.[9]

In December 2021, Vedanta said it was looking forward to working with the government "to use green energy for KCM, ensuring it is running and we are mining sustainably, benefiting both the environment and bringing stability to the local communities."[10]

As of May 2022, the Zambian government has yet to restore control of KCM to Vedanta.[11] A leaked letter, written by a Vedanta chief executive and addressed to Zambia's Mines Minister, stated that the company is willing to invest $1 billion towards capital mine development and other infrastructure.[12]

Given the complicated supply situation, Vedanta's "green energy" statement, and no known developments related to the 300 MW coal project since 2018, plans for the coal plant appear shelved or cancelled.

Project Details

  • Sponsor: Konkola Copper Mines
  • Parent company: Vedanta Resources
  • Location: Chililabombwe, Copperbelt Province, Zambia
  • Coordinates: -12.366667, 27.827778 (approximate)
  • Status: Cancelled
  • Gross Capacity: 300 MW
  • Type:
  • Projected in service:
  • Coal Type:
  • Coal Source:
  • Source of financing: Vedanta to invest $300 million

Articles and resources

References

Related GEM.wiki articles


External Articles