LIVINGSTONE MARUFU
Zimbabwe’s multi-billion dollar mining sector is pushing for more dedicated power lines, a move it hopes would help miners ramp up production and generate more foreign currency for the economy.
Zimbabwe, last year, experienced severe power woes, but the situation improved this year.
Although Zesa has ring-fenced most miners after they agreed to pay for supplies in foreign currency, the Chamber of Mines of Zimbabwe (CoMZ) said more dedicated lines were now required to improve production.
Recently, Zesa was accused of failing to honour the ring-fencing agreements with miners.
“We have had disruptions here and there but there were no major challenges in power supply.
Power quality is questionable here and there due to lack of dedicated power lines or low voltage which has been a major problem of late therefore we need more dedicated power to ramp up production,” CoMZ chief executive officer, Isaac Kwesu told Business Times.
“Overall, the majority of mines currently have dedicated power agreements which means they must have uninterrupted power supply.
We want to see these continue in future to sustainable output increase as well as meeting new projects coming on board.”
Kwesu said mining was a 24-hour business and miners should be able to work longer periods to make up for the time lost during the first lockdown period which restricted essential human movement.
He said miners were not affected by power tariff increases in the past year or so as they were paying fixed foreign exchange power tariffs which came with dedicated or guaranteed power.
CoMZ president Elizabeth Nerwande said the chamber was hopeful that “continued dialogue and cooperation with Zesa and other key stakeholders will result into a broad-based development through a thriving and growing mineral resource sector”.
“The Chamber of Mines applauds efforts by all stakeholders in averting the power shortages during the course of this year, in particular the Reserve Bank of Zimbabwe (RBZ), Energy and Power Development ministry and Mines and Mining Development ministry,” Nerwande said.
In his 2021 pre-Budget Strategy paper, Finance and Economic Development minister Mthuli Ncube said mining and quarrying will grow by 11% next year on investment in the sector and firming international mineral prices.
RBZ governor John Mangudya said the central bank would work closely with the mining sector as it is critical in the growth of the economy.
The sector contributes over 60% of the country’s export earnings and accounts for between 15% and 20% of the gross domestic product.
The mining sector, along with the rest of the country’s economy, had been adversely affected by the crippling power outages in the past year.
But, a notable improvement has been seen this year.
Miners have also appealed to the central bank to be allowed to retain 100% of their foreign currency earnings, instead of the current 70% so that they are able to pay taxes and levies.
In a 2020 state of the mining survey report released yesterday, 80% of the respondents indicated that they were facing moderate and occasional power outages not exceeding six hours.
The remaining 20% who reported to be facing power outages exceeding 6 hours cited ageing transmission infrastructure as the major source of outages.
All respondents however indicated that the frequency of power outages had increased although the number of hours of power outages per day remained low.
In the 2020 survey report, 80% indicated that the moderate power outages resulted in output losses not exceeding 10% while the remainder reported that the lost output exceeded 10% due to power outages.
In 2021 all miners are expecting ZESA to guarantee uninterrupted electricity supply to mining companies to minimise production stoppages and output losses. About 50% of the respondents proposed an electricity tariff of US4c/ KWh to US6c/ KWh, with the highest tariff not exceeding US8c/KWh.
