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ZIMBABWE’s platinum miners and ferrochrome producers have reached an agreement with power utility Zesa Holdings to prepay for power directly from regional suppliers amid foreign exchange shortages in the country.
“This is a payment plan and it’s confidential,” Zesa Chief Executive Officer Engineer Joshua Chifamba said Friday in an interview in Kariba, 367 kilometres west of Harare.
“It’s early days yet, but so far, so good.” Zimbabwe’s Reserve Bank has committed to making money available for buying electricity,” he said.
The arrangement with ferrochrome and platinum producers will continue “as long as the forex challenge remains as it is,” Eng Chifamba said during a tour of a project under way to upgrade the country’s Kariba power plant.
Zimbabwe, which abandoned its own currency in 2009 and mainly uses the dollar, buys power from South Africa’s Eskom Holdings SOC Ltd and Mozambique’s Cahora Bassa hydropower plant.
Electricity production from the Kariba power plant has fallen after reservoir levels dropped to their lowest in decades following a drought.
The country has also grappled with foreign currency shortages for months. Zimbabwe has three platinum mines, Mimosa, Unki and Zimplats, and the country’s largest ferrochrome producers are Zimbabwe Alloys, Afrochine and Sinosteel unit Zimasco. The agreement allowing the sectors to prepay suppliers directly for imported power follows a similar deal reached earlier this month with the Confederation of Zimbabwe Industries, a group of Zimbabwe’s largest companies including brewer Delta Corp Ltd.
and mobile-phone operator Econet Wireless Zimbabwe Ltd. The upgrade to Kariba is 70 percent complete, with the first unit due to come on stream in December and the second in the first quarter of 2018, Eng Chifamba said. The $355 million upgrade will increase power production from the current 750 megawatts to 1 050 megawatts by 2019, assuming sufficient water levels in the dam, the world’s largest by volume.
The Zambezi Water Authority, which allocates water for power generation, has increased Zimbabwe’s allowance to 15 billion cubic meters this year, up from 10 billion cubic meters last year. The reservoir’s main inflows, from rainfall in northern Angola and the Democratic Republic of Congo, arrive between May and July.
Ferrochrome production in Zimbabwe decreased significantly after the government allowed miners to export unprocessed chrome ore in 2009.
Miners had complained that power outages affected their ability to smelt the metal.-Bloomberg
Online Reporter