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UPDATE 1-Zambia's copper mine suspends operations after restricted power supply

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LUSAKA, Aug 12 (Reuters) - Glencore's Zambian Mopani Copper Mines unit suspended operations in certain areas on Saturday after the Copperbelt Energy Corporation (CEC) restricted power supply to its sites in both the Kitwe and Mufulira regions.

"In the interest of safety, Mopani has with immediate effect suspended operations in certain areas, and all our miners who were underground at the time of restricting power supply, have successfully returned to the surface," the copper producer said in a statement.

Mopani owns the Mufulira underground shaft in Mufulira, the Nkana underground shaft, South Ore Body shaft and the Mindola shaft in Kitwe.

The decision comes after a dispute over the implementation of new electricity tariffs, which Mopani and other mining companies have contested in court and remain unresolved, the miner said.

The southern African country, which is a major copper producer, is struggling to maintain power supplies as a severe drought has caused levels to drop in the Kariba Dam which generates much of the nation's electricity.

The government in April proposed introducing a flat tariff of 9.30 U.S. cents/kilowatt hour (kWh) backdated to January for mining companies, instead of individually negotiated rates that have averaged 6 U.S. cents/kWh, but mining companies opposed the plan. Other mining companies operating in Zambia, Africa's No. 2 copper producer, include Brazil's Vale and London-listed Vedanta Resources .

In May, Finance Minister Felix Mutati said the government is close to reaching an agreement with mining companies over its plans to increase electricity prices.

(Reporting by Chris Mfula; Writing by Nqobile Dludla; Editing by Alison Williams and David Evans)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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