Zambia power firms to reduce supply to mines by 30 percent

LUSAKA, Aug 12 (Reuters) - Zambian power companies will cut electricity supply to mining firms by 30 percent due to a power deficit which threatens to bring the economy of Africa's No.2 copper producer to its knees, an industry official said on Wednesday.

The decision was reached on Tuesday in a meeting involving mining companies, state power utility Zesco Ltd and the largest supplier of power to the mines, Copperbelt Energy Corp, Zambia Chamber of Mines president Jackson Sikamo told Reuters.

Zesco Ltd, which generates most of Zambia's electricity, is limiting supplies due to a 30 percent deficit after water levels at its hydro-electric plants fell due to drought, he said.

"Both Zesco and CEC have indicated that they will make available 70 percent of the power and the remaining 30 percent will have to be imported at higher cost," Sikamo said.

Individual mining companies were expected to inform their power suppliers how much of the imported power they need this week and agreements may be signed by next week, he said.

The power imports would mainly be sourced from coal-fired and diesel-powered thermal plants within the region, he said.

"This is very urgent because water levels continue going down and if there are no cut backs now, Zambia may be plunged into a total blackout by October," Sikamo said.

Mining companies operating in Zambia include First Quantum Minerals, Vedanta Resources (Other OTC: VDNRF - news) , Glencore (Xetra: A1JAGV - news) , Barrick Gold Corp TO> and VALE. (Reporting by Chris Mfula; Editing by James Macharia)