Why Zesa pulled plug on Sable Chemicals

via Why Zesa pulled plug on Sable Chemicals – NewsDay Zimbabwe January 6, 2016

Zesa resolved to cut power to the country’s sole ammonium nitrate fertiliser manufacturer, Sable Chemicals, after the latter’s failure to harness its ballooning power bill estimated at $150 million, sources have revealed.


“We are selling power to them (Sable Chemicals) at a subsidised rate of 5 cents per kilowatt, while domestic consumers are buying at 9 cents per kilowatt. Sable Chemicals was failing to pay its debt and, therefore, affecting our operations,” the source said.

“Because of their huge debt, management felt it was better to supply our premium prepaid consumers ahead of Sable Chemicals, that’s why we cut off power supplies.”

Zesa spokesperson, Fullard Gwasira confirmed that Sable Chemicals’ bill was around $150 million.

“We are owed lots of money by industry, for example Sable Chemicals alone owes us $150 million and these debts have serious implications on our operations as a power utility,” he said.

Sable Chemicals CEO, Jack Murehwa said the issue of the power debt was being discussed at a high level. He refused to be drawn into discussing figures.

Murehwa, however, denied owing Zesa any money, saying the debt was the government’s component of the bill.

Zesa is currently importing 300 megawatts of prepaid power from South Africa’s Eskom to augment supplies by local generators.

“We are, for the first time, importing power from South Africa and what people should understand is that these are prepaid imports and without cash we will not be able to buy power. Therefore, our premium consumers are domestic consumers who are prepaid clients,” Gwasira said.

Mines minister Walter Chidhakwa said the mining sector enjoys special power rates, with chrome smelters buying electricity at 6 cents per kilowatt.

“They get that special rate because about 40% of chrome production is made out of the electricity component and, therefore, for production to be viable the rates had to be reduced,” he said.

Sable Chemicals was consuming 80 megawatts of power and employing 493 workers before Zesa cut power supply to less than 10 megawatts.

The fertiliser producer was then forced to retrench over half of its workforce after closing down its electrolysis plant.



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    If it requires artificially reduced tariffs to make chrome production ‘viable’ then, ipso facto, chrome production is not viable. It’s this sort of dumb thinking that has led us to where we are – at the bottom of the list of least viable nations.