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ABB to Power Africa's Copper Mine

Zacks Equity Research

ABB Ltd. (ABB) received a $32-million worth order from Kansanshi Mining PLC, a subsidiary of Canadian mining and metals company First Quantum Minerals Ltd. (:FQM). The contract requires ABB to construct a new substation to facilitate reliable power supply to the biggest copper mine in Africa. The project is expected to be completed by 2014 and ABB has booked the order in its second quarter of 2013.  

The scope of the order includes design, engineering, supply and installation. According to the contract, key product supplies include high and medium-voltage air-insulated switchgear and power transformers. In addition, the substation will also be equipped with automation, control and protection systems conforming to international IEC 61850 standards, to enable local and remote monitoring and control the power assets.

The copper mine being built in Zambia is one of the biggest in the African continent. Zambia’s economic growth is primarily dependent on the mining industry. The mining industry accounts for approximately 80% of the total GDP of Zambia. The project is not only going to help improve the country’s GDP, but is also believed to provide employment in the Zambezi Basin area, a new town being built to support the mining operations.

This new substation by ABB will be the main junction in the new 330 kV transmission ring that will link the capital Lusaka and the copper belt area. These two are connected with two main supply transmission line systems and the new substation will help improve power quality in the Zambian network.

Africa ranks number 8 globally in terms of copper production. In addition to building a new substation, ABB is also expected to supply telecommunications systems and solar photovoltaic-powered repeater stations to assist reliable long-distance transmission of digital signals via fiber-optic cables to a remote-end substation located about 400 kilometers away.

Based in Zurich, Switzerland, ABB is a power and automation technology company and currently has a Zacks Rank #3 (Hold). Some other companies in the similar industry worth considering at the moment are Plug Power Inc. (PLUG), Rexnord Corp. (RXN) and AO Smith Corp. (AOS). All three carry a Zacks Rank #2 (Buy). 

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