Firms cry foul over Zesa forex deals
MINING companies that made advance foreign currency payments to Zesa Holdings for uninterrupted power supplies are facing viability challenges as the power utility is failing to deliver, legislators heard yesterday.
South Africa’s Eskom has been significantly reducing peak power supplies to Zimbabwe and is charging more because of rising demand in its own market, resulting in load-shedding there.
Chamber of Mines chief executive officer Mr Isaac Kwesu said Zesa was breaching a contract for continuous supply of electricity, affecting production and the country’s target of achieving a $12 billion mining industry output by 2023.
Mr Kwesu revealed this when he and other industry stakeholders appeared before the Parliamentary Portfolio Committee on Mines and Energy chaired by Shurugwi South MP Cde Edmond Mkaratigwa (Zanu-PF.)
He said Zesa promised uninterrupted power supplies saying the advance forex payments would make it easier to import power and direct it to the paying mines.
Government allowed export-oriented firms like mining houses to make the advance payments to spare them from load-shedding.
“We need adequate power and we continue to experience power outages. Zesa needs support to import adequate power.
“Despite having paid for electricity to be imported, the power has not been coming as expected. We are engaging Zesa and the Ministry of Energy to make sure that power is prioritised to mining as agreed in the contracts for dedicated power,” said Mr Kwesu.
He said there was need for the Reserve Bank of Zimbabwe (RBZ) to support Zesa to enable it to levy cost reflective tariffs to remain viable.
“The mining industry requires adequate forex to meet regular operational requirements as well as the new emerging demand for forex such as payment of royalties in foreign currency.
“These emerging demands were not originally factored in the model RBZ used to allocate 50 percent to the mining industry. It is our hope that these issues will be addressed because it remains one of the major risk areas that will affect the industry, especially in view of achieving the $12 billion industry by 2023,” he said.
The country is experiencing a disruptive load-shedding schedule with some consumers going for over 10 hours without power.
Zesa has had to drastically cut output at its main power station, Kariba South, where the hydroelectric plant has been affected by drought.
Hwange Thermal Power Station is operating at well below design capacity because of long-term maintenance neglect.
Low water levels in Kariba Dam have adversely affected electricity generation, amid reports from Zambia that power generation could be stopped.
Kariba, which has capacity to generate 920MW, was producing 200MW yesterday.
Zimbabwe Power Company (ZPC)’s plants — Harare, Munyati, Bulawayo, Hwange and Kariba — were generating 582MW against a national demand of 1 400MW.