No power tariff deal for Zim chrome miners
Utility rejects request for 40% to 50% cut
THE ZIMBABWEAN power utility, Zesa, has refused to lower tariffs for chrome miners, shutting the door on other companies that expected a reduction, despite pleas from the mining ministry.
The state company turned down the proposals this week, saying that chrome miners would pay a tariff of about 6.7 cents per kilowatt hour.
The miners, which are locked in wage negotiations, described the tariff as excessive.
“Electricity costs have been a drain. It is the major cost component and employees are pushing for a salary rise, which will further strain operations,” a mining executive said.
The reduction would have brought tariffs in line with those in South Africa, a rival producer.
Munyaradzi Dube, the managing director for ferrochrome producer ZimAlloys, said yesterday that the reduction would have brought tariffs in line with those in South Africa, a rival producer.
Dube said Zimbabwean chrome miners would press ahead for the tariff reduction of between 40 and 50 percent.
The miners are crucial in the country’s economic value chain, because they help Zesa with foreign currency to import electricity from South Africa and Mozambique. Despite this, their requests for a reduction were turned down.
The government, through the energy sector regulator, has also turned down an application by Zesa.
Metallon Corporation, a major gold producer, said on Monday that it had missed its 2016 production target by about 2 percent, partly because of power-supply constraints during the year.
The bullion producer, which produced about 94 200 ounces in 2016, said “power supply interruptions affect(ed) all operations, especially at (the flagship) Redwing Mine”.
However, Metallon has projected that new processing plants and other projects would bring production back to about 115 000 ounces of gold.
Mining companies in Zimbabwe – including Anglo Platinum, Impala Platinum, Sibanye Gold and Metallon – are Zimbabwe’s major export earners.
There was no immediate comment from Zesa.
Power-supply constraints have disrupted production, and the refusal by the power utility to lower tariffs is set further to stretch the miners’ financial position, which is already under pressure because of the liquidity crunch in the country.