Miners call for lower power tariffs

Source: Miners call for lower power tariffs – DailyNews Live

Ndakaziva Majaka      7 February 2017

HARARE – Zimbabwean miners have urged national power utility, Zesa
Holdings, to reduce its electricity tariffs in an effort to boost the
country’s mineral output.

Mines minister Walter Chidakwa last week said he was lobbying for a
special power tariff of $0,04 per kilowatt hour (kwh) from the current
$0,06/kwh for chrome miners to reduce production costs.

“All miners, particularity ferrochrome companies, have the problem of
power… we would want a good price… 40 percent of the cost of running a
furnace is power so they are huge power guzzlers,” he said, adding that it
would be difficult to attract smelters under the current high tariffs.

“All smelting facilities, whether you are talking about gold smelting or
platinum group of metals, nickel smelting and the like, they use a lot of
power and particularly ferrochrome processors,” the minister said.

This comes as most of the country’s mining companies are directly
importing power from regional power suppliers on the back of unsustainable
prices offered by the local power utility.

The rest of the mining sector is still lobbying for a slash in the
electricity tariff, from the present $0,12/kwh to at least $0,08/kwh amid
indications that miners lost between $200 000 to $5 million in output to
power cuts in 2016 alone.

Chidakwa said while it would be ideal for local chrome companies to export
high carbon ferrochrome – a higher grade of the metal, which requires more
power to produce and fetched more on the international market – government
lifted its raw chrome exports ban temporarily to allow chrome miners space
to develop and invest.

“But in the meantime, to cover that gap we are allowing them to export raw
chrome so that they can balance their costs and once you have sorted out
the power issue, we can revert to the ban…

“A power cost of below $0,04c/kwh would be the best power for us… At the
moment power for the chrome smelters is at 6,7c/kwh and it is putting a
lot of pressure on the miners and you would need a very high price of the
metal for you to cover such high costs of power,” he said.

This year, Zimbabwe is planning to export over 800 000 tonnes of chrome
following the country’s move to re-distribute ground previously held by
chrome miners.

Information gathered by businessdaily, however, reveals that Zesa is
unwilling to play ball claiming that would make it difficult for it to pay
for power imports.

The power utility has indicated that it is spending $5 million per week on
power imports from South Africa and Mozambique to augment
locally-generated electricity.

Zimbabwe is currently generating 888MW against a national demand 1400MW,
implying that the difference would be met through imports, and in some
cases load shedding.

In the third quarter of 2016, the Zimbabwe Power Company (ZPC) – an
investment vehicle in electricity generation – sent out 1 758, 24 GWh
against a target of 1 935 10 GWh, missing its target by 9,14 percent.

ZPC said it missed the target due to a number of factors “including cash
flow challenges” and forced outages at Hwange because of tube leaks and ID
fan challenges.

Load shedding is gradually hitting domestic consumers after a long period
of uninterrupted power supply stretching back to Christmas last year.