Miners engage Zesa over power crisis
ZIMBABWE’S leading mining companies say they are negotiating with Zesa Holdings to guarantee adequate power supplies and lower tariffs as the country reels from an energy deficit.
e country’s business sector is battling constant power outages that lead to production stoppages and output losses.
Zimbabwe’s electricity shortages have been worsened by constant breakdowns at the
Hwange ermal Power Station and low water levels at Kariba Dam.
Hwange and the Kariba Hydropower Station are the country’s biggest sources of electricity.
Chamber of Mines of Zimbabwe (COMZ) president omas Gono’s speech was read on his behalf by the chamber’s chief executive officer, Isaac Kwesu.
“ e chamber is engaging Zesa and the government to prioritise mining companies for available power at a tariff that is in line with the region,” Gono saidat the Association of Mines Managers of Zimbabwe annual conference held in Victoria Falls recently.
“It is without doubt that the conference programme will touch on all pertinent technical aspects that position our mining industry as a competitive global market driven by innovation. Zimbabwe’s mining sector is a strategic pillar to the national economy.
“It is currently accounts for 13,5% of the country’s GDP (gross domestic product), earns over 80% of the country’s foreign currency, and mining companies contribute 19% of their revenues to the government through taxes and levies."
In its Mining Industry Prospects for 2024 incorporating the State of the Mining Industry Survey Report, COMZ said miners expressed concern on the new electricity tariff of US$0,14 per kilowatt hour (KWH).
ey said the reviewing of the tariffs from US$0,12 per KWH would result in the cost of production increasing by between 7% and 10%. Miners also expressed concern over tariffs that are strictly in foreign currency.
Miners requested a downward tariff review and recommended a tariff ranging from around US$0,07 per KWH for ferrochrome producers with a cap of US$0,10 per KWH for the rest of the mining industry.
ey also recommended that the electricity tariff should be paid in line with foreign exchange retention level pegged at 75%.
Gono said the mining sector recorded a mixed performance during the six months to June 2023, compared to the same period in 2022.
He said minerals that recorded increases in production volumes during this period included iridium at 16%, nickel (24%), and cobalt (73%).
“Minerals that recorded declines in production during this period include gold -11%, platinum -1%, rhodium -5% and palladium -2%,” he said.
e COMZ boss said while mineral output was expected to increase in 2024, the softening global mineral prices would cut into the expected returns.
“Most mining companies are planning to ramp up production in 2024 to compensate for falling earnings due to softening prices,” Gono said.
“Despite the anticipated increase in production, mineral earnings are expected to decline by an average of 14% in 2024.
“Despite most mining companies planning to ramp up production to compensate for revenue losses due to low prices, the production increase is expected to be more than offset by the decline in prices."
In making the case for stable power supply, Gono said the mining industry attracted more than 73% of the foreign direct investment into the economy, against a regional average of 31,7%.
He said the mining industry employed over 53 663 people in the large scale mining sector with a further 500 000 in the artisanal category.
According to the COMZ, statistics on the ground show that for every United States dollar generated by the sector, US$3 or more are generated in other sectors of the economy through linkages.