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Zambia, Africa's second-largest copper producer, has urged mining companies to significantly reduce their power consumption by 40% as the country faces its worst drought in decades, affecting hydroelectric power generation.

Zesco Ltd., the state-owned power utility, has asked mining operators to enhance power-saving measures or source their own emergency power starting this month, according to First Quantum Minerals Ltd., which contributes over half of Zambia’s copper output. Zesco did not respond to requests for comments.

First Quantum has been able to meet more than half of its normal power needs through imports, reducing the burden on other mining customers to about 35%, stated Country Director Anthony Mukutuma in an interview on Thursday. “This proactive approach ensures we are better prepared for the rest of the year,” Mukutuma explained, noting that the company sources emergency electricity primarily from Namibia and Mozambique. “If the situation worsens, we’ll have our direct imports to rely on.”

While Mukutuma refrained from speculating on potential production impacts due to the worsening power crisis, he mentioned that sourcing more expensive power would add an average of $0.06 per pound of copper to the company’s basic cash costs over 2024, double the impact estimated in April. First Quantum had previously stated in April that they did not anticipate major interruptions.

Copper is vital to Zambia, generating about 70% of its export earnings. To mitigate the power crisis’s impact on the mining sector, the government has prioritized shielding the industry. Consequently, residential electricity users face daily power cuts lasting at least 12 hours.

Production has remained stable due to the collaboration between the mining industry and the government, according to Sokwani Chilembo, CEO of the Zambia Chamber of Mines. “So far, power imports from neighboring countries have helped prevent major disruptions,” Chilembo said in a phone interview on Friday. “We will need to see how the situation unfolds in the fourth quarter, but the regional arrangements are robust for now.”

First Quantum is also supporting plans for private power companies to develop renewable energy projects in Zambia. The company aims to finalize a power-purchase agreement with a consortium including TotalEnergies SE for wind and solar projects that will produce a combined 430 megawatts by late 2027, Mukutuma revealed. Additionally, First Quantum is looking to partner with developers on 50 megawatts of hydropower projects in parts of Zambia not currently served by existing plants to diversify risks.