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THE Government will push for the reduction of power tariffs applicable to the chrome sub-sector to at least four cents per kilowatt hour to attract increased investment in chrome ore smelters.
Zimbabwe, whose chrome deposits are the second largest in the world after South Africa, allows raw chrome exports due to limited smelting capacity.
Mines and Mining Development Minister Walter Chidhakwa said a lower power tariff would spur value addition and beneficiation of chrome ore.
“Power below four cents per kilowatt hour would be the best for us. At the moment power for the chrome smelters is at 6.7 cents per kilowatt hour and its putting a lot of pressure. You need a very high price of the mineral for you to cover the high costs of power,” he said.
“It is critical to note that any future development in the chrome sector should have a favourable ring-fenced power tariff for the smelting as an incentive to the development of value addition for the production of ferrochrome and ultimately steel.”
Minister Chidhakwa said power charges were a major concern for chrome smelters as power accounted for up to 40 percent of the cost of running a smelter.
Zimbabwe is anticipating to double chrome ore production this year to 550 000 tons from 284 943 tons last year.
Ferrochrome (refined chrome ore) production is also expected to increase to 300 000 tons, up from 149 000 tons.
Last year, Zimbabwe realised $115 million from the export of 149 000 tons of ferrochrome while $31 million was earned from the export of 284 943 tons of raw chrome compared. — New Ziana
Online Reporter