Miners demands tariff cuts
ROBIN PHIRI
The mining sector is urging government and regulators to slash electricity tariffs, warning that soaring power costs and persistent outages are eroding production capacity and undermining profitability.
According to the State of the Mining Industry Survey, 90% of respondents described the general electricity tariff of USc14.21 per kilowatt hour (kWh) as uncompetitive, making Zimbabwe one of the region’s costliest mining jurisdictions.
Ferrochrome producers currently benefit from a negotiated special tariff of about USc8/kWh, which most mining houses say is “reasonable.”
Yet even under this preferential regime, power consumption still absorbs 40% of earnings for ferrochrome producers and about 12% of earnings across other mineral operations. When mines are forced to resort to diesel generators during outages, costs “escalate sharply,” sometimes exceeding USc30/kWh, the survey noted.
“Analysis of tariff proposals show that the average tariff tolerance level for the mining industry is around USc10/kWh. Approximately 75% of mining executives indicated that they would accommodate a tariff of less than USc10/kWh while 25% indicated that they would tolerate a tariff of above USc10/kWh but not exceeding USc13/kWh,” the survey indicated.
Mining executives have therefore recommended that tariffs be capped at USc10/kWh, with three-quarters of industry leaders warning they cannot sustain operations above this threshold. The remaining 25% say they could accept up to USc13/kWh, but nothing higher.
The sector’s frustration extends beyond pricing. “Respondent mining executives bemoaned fragile power characterized by episodes of unscheduled outages that resulted in production stoppages. In the outlook for 2026, the majority of respondent mining executives are generally pessimistic about power supply availability at their operations. Most respondents cited the following factors as potential risks to power supply,” the survey stated.
In addition to electricity shortages, the report highlights broader infrastructure gaps—deteriorating rail and road networks, water constraints, and inadequate transmission capacity—all of which are undermining operational efficiency and threatening long-term sector viability.
To stabilise the operating environment, mining executives proposed a set of urgent policy actions. These include prioritising mining companies in power allocation, offering government incentives such as tax breaks to accelerate investment in Independent Power Projects (IPPs), and releasing mines from long-term ZESA contracts to allow access to private power suppliers.
The industry also wants ZERA to fast-track licensing for Independent Power Producers and resolve bottlenecks in electricity wheeling. At the same time, ZESA is being urged to reduce wheeling charges, import cheaper electricity, and rehabilitate ageing transmission infrastructure to ensure the grid can absorb additional capacity and support future expansion.
