First Quantum to Cut About 1,480 Zambia Jobs on Power Shortages

First Quantum Minerals Ltd. will cut about 1,480 construction jobs at copper and nickel mines in Zambia as part of cost-reduction plans needed after the nation’s electricity utility reduced supply.

The company’s Kalumbila Minerals unit, known as KML, will bring forward the cuts to the first weeks of August, Vancouver-based First Quantum said in an e-mailed statement.

“If power-supply shortages in Zambia continue and cannot be supplemented by imported power, KML will likely need to take further actions to secure viability,” it said.

Zesco Ltd., Zambia’s state-owned power utility, has reduced electricity supplies to First Quantum by almost 25 percent after low rainfall hindered output at the hydropower plants it depends on for more than 90 percent of generation capacity. The southern African nation is the continent’s largest copper producer after the Democratic Republic of Congo.

First Quantum last week closed the processing plant at its $2.1 billion Sentinel copper mine about seven months into operations because of the cuts. While it continues basic mining there, “production is simply not viable at the power restriction of 42 megawatts,” it said.

As agreed with Zesco, most of the 42 megawatts has been redirected to Kansanshi Mining, where supply was restricted to 117 megawatts, it said.

First Quantum, which has invested more than $3 billion in Sentinel and Kansanshi since 2012, has made proposals to help the government with electricity imports, “which could help mitigate the possibility of more severe actions to reduce costs and maintain the viability of the mines,” it said.

The producer has spent $198 million in asset upgrades on Zesco’s Lusaka-North Western province power line, it said.

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