Zambia's CEC delays plan to cut power supply to mines

(Adds Chamber of Mines, minister, CEC comments)

LUSAKA, July 31 (Reuters) - Zambia's power supplier Copperbelt Energy Corp. (CEC) has delayed a plan to reduce electricity to mines after mining firms warned they would have to close processing plants and shed jobs, an industry official said on Friday.

Zesco Ltd., the main power generating firm in Africa's No. 2 copper producer, is limiting supplies after water levels at its hydro-electric plants fell due to drought.

CEC buys electricity from Zesco in bulk and sells it to mining companies including the local units of Vedanta Resources (Other OTC: VDNRF - news) , Glencore (Xetra: A1JAGV - news) and Vale.

On Thursday, CEC told mining firms it would reduce power supply by 30 percent to mines from Friday.

"CEC told us that the planned reduction of power supply will be delayed pending the outcome of a meeting with mining firms tomorrow (Saturday)," Zambia Chamber of Mines president Jackson Sikamo told Reuters.

Energy minister Christopher Yaluma said the government would not allow any reduction in power supply to mines without consultations with them, state radio reported on Friday.

Yaluma said a huge reduction of power supply to smelters would dent Zambia's copper production.

"Power supply has not been reduced," an industry source said. "Mining companies yesterday made a very serious presentation to the government, Zesco and CEC that reducing supply as planned would lead to closures of processing plant and job cuts."

CEC spokeswoman Chama Nsabika-Kalima said the company was holding talks with some of its customers and would comment after the meeting.

Canada's First Quantum Minerals (Toronto: FM.TO - news) on Monday shut its Sentinel copper processing plant after Zesco reduced electricity supply to its operations by 24 percent.

Chief executives of mining companies were due to meet on Friday to plan how their firms would reduce their own electricity demand, another industry source said.

"The idea is to put in place a power rationing plan that will not seriously disrupt operations and undermine safety," the source said. (Reporting by Chris Mfula; Editing by James Macharia)