be careful, page-2

After a little digging I found this....

Zambia's state power utility, Zambia electricity supply Corp., or Zesco, and Equinox Minerals LTD.'s (EQN.T) Lumwana Copper Mines are embroiled in a power supply dispute as Lumwana moves closer to starting commercial copper production.

The power utility wants to terminate the power supply agreement with Lumwana and has threatened to disconnect power supply from the mine on Jan. 26, next year.

Kevin van Nierkerk, Equinox Minerals vice president in charge of corporate affairs, said the dispute is now before courts of law and outside the court, the company won't be making further comments.

Zambia's state-owned daily, The Times of Zambia reported Friday that Lumwana had petitioned the Lusaka high court for a protective relief against the threat to terminate the power supply agreement pending an arbitration hearing of the dispute in the London Court of International Arbitration.

The newspaper quoted an affidavit sworn by Harry Michael, the Lumwana managing director, as saying that the mining company had met all conditions in the power supply agreement with Zesco including payment of $16 million as its share of capital to the Lumwana Power Project.

However, the company accuses Zesco of failing to comply with the requirements of the agreement and Lumwana has since referred the matter to an arbitration process.

Zesco could not give an immediate comment.

Despite the dispute, Niekerk told Dow Jones Newswires in an email Friday that operations are unaffected.

"Lumwana is on schedule to produce concentrate this month with commercial quantities expected to be produced from December 2008 onwards," he said.

Since the start of the year, Zambia has been facing a power crisis which has hurt mining operations in the country, with new mining projects like Lumwana, Chambishi Copper smelter and Konkola Copper Mines deep mine project coming on stream. Zambia's power facilities are likely to be overstretched.

By Nicholas Bariyo, contributing to Dow Jones Newswires


hopefully it can be resolved, however it could spell future problems