POWER DEAL

Zim’s plat­inum min­ers and fer­rochrome pro­duc­ers in pre-pay deal with Zesa Hold­ings

The Star Early Edition - - BUSINESS REPORT - God­frey Marawanyika and Brian Latham

ZIM­BABWE’S plat­inum min­ers and fer­rochrome pro­duc­ers reached an agree­ment with power util­ity Zesa Hold­ings to pre-pay for power di­rectly from re­gional sup­pli­ers amid dol­lar short­ages in the coun­try.

“This is a pay­ment plan and it’s con­fi­den­tial,” Zesa chief ex­ec­u­tive Joshua Chi­famba said on Fri­day in an in­ter­view in Kariba.

Zim­babwe’s Re­serve Bank has com­mit­ted to mak­ing money avail­able for buy­ing elec­tric­ity, he said. The ar­range­ment with fer­rochrome and plat­inum pro­duc­ers will con­tinue “as long as the forex chal­lenge re­mains as it is,” Chi­famba said dur­ing a tour of a project un­der way to up­grade the coun­try’s Kariba power plant.

Zim­babwe, which aban­doned its own cur­rency in 2009 and mainly uses the dol­lar, buys power from South Africa’s Eskom and Mozam­bique’s Ca­hora Bassa hy­dro power plant. Elec­tric­ity pro­duc­tion from the Kariba power plant has fallen af­ter reser­voir lev­els dropped to their low­est in decades fol­low­ing a drought.

The coun­try has also grap­pled with for­eign cur­rency short­ages for months. Zim­babwe has three plat­inum mines: Mi­mosa, Unki and Zim­plats and the coun­try’s largest fer­rochrome pro­duc­ers are Zim­babwe Al­loys, Afro­chine and Si­nos­teel unit Zi­masco.

Sim­i­lar deal

The agree­ment al­low­ing the sec­tors to pre­pay sup­pli­ers di­rectly for im­ported power fol­lows a sim­i­lar deal reached ear­lier this month with the Con­fed­er­a­tion of Zim­babwe In­dus­tries, a group of Zim­babwe’s largest com­pa­nies in­clud­ing brewer Delta Corp and mobile-phone op­er­a­tor Econet Wire­less Zim­babwe.

The up­grade to Kariba is 70 per­cent com­plete, with the first unit due to come on stream in De­cem­ber and the sec­ond in the first quar­ter of 2018, Chi­famba said.

The $355 mil­lion (R4.77 bil­lion) up­grade will in­crease power pro­duc­tion from the cur­rent 750MW to 1 050MW by 2019, as­sum­ing suf­fi­cient wa­ter lev­els in the dam, the world’s largest by vol­ume.

Fer­rochrome pro­duc­tion in Zim­babwe de­creased sig­nif­i­cantly af­ter the gov­ern­ment al­lowed min­ers to ex­port un­pro­cessed chrome ore in 2009. – Bloomberg

PHOTO: REUTERS

A con­veyor belt car­ries ore ex­tracted at Mi­mosa Plat­inum mine, about 400km south of Harare. Plat­inum min­ers and fer­rochrome pro­duc­ers have reached an agree­ment with power util­ity Zesa Hold­ings to pre-pay for power from re­gional sup­pli­ers.

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