GOLD miners are lobbying Government to cut their electricity tariffs from USc12,8 per kilowatt hour to USc8, saying this will boost operations.
Some mining houses want a tariff directly linked to international commodity prices.
Representations to this end have been made to both the Finance and Mines and Mining Development ministries. The Chamber of Mines of Zimbabwe indicated in its 2016 State of the Mining Industry Report that the cost of power was “too high and should be reviewed downwards”.
Mines Deputy Minister Engineer Fred Moyo told The Sunday Mail Business recently that mining houses had “presented their position” to Government.
Zesa Holdings spokesperson Mr Fullard Gwasira said last week that consultations are underway with electricity consumers, including gold miners, over tariffs.
“Each year, depending on the economic situation, ZETDC (the Zimbabwe Energy Transmission and Distribution Company, a Zesa subsidiary) approaches the regulator and engages its various customers on tariff issues for continued sustenance of the power supply situation. The year 2017 is no different, with the discussion process with various institutions going on.
“The position of the tariff is arrived at after wide consultations with stakeholders, gold miners included, and the review of the tariff downwards without taking into consideration an-all stakeholder position, consultation and effect is detrimental to the stability and efficient service delivery of the power sector.
“As discussions are on-going, it is not feasible for us to share such matters with third parties without the expressed concurrence of all parties involved,” said Mr Gwasira.
In June 2016, the Zimbabwe Energy Regulatory Authority turned down Zesa’s application to hike tariffs to USc14,69 from USc9,86/kWh.
Listed gold producer Falgold — which reported a US$1,3 million loss for the year ended September 30, 2016 — estimated that it could have saved US$12 million last year had the tariff been pegged at USc8.
It is not only high tariffs that are denting miner’s profits, but intermittent supplies too.
Zimbabwe’s biggest gold producer, Metallon Corporation, lost 428 hours in downtime between November 2016 and February 2017 and is now pursuing alternative power sources to supplement grid supplies.
Mr Gwasira said, “It is true that some domestic consumers and institutions, including mines have been affected by power outages. These outages are as a result of faults caused by equipment failure. The good rainy season that we have just had caused some underground cables and overhead lines to fault thereby affecting continuous supplies to customers.”
Zesa is negotiating with mining firms to prepay for electricity so that it secures power from Eskom (South Africa) and Hydro Electrica De Cahora Bassa (Mozambique).
The gold mining sector is targeting to produce 28 tonnes this year from 23 tonnes in 2016. First quarter deliveries dived 2,7 percent to 4,6 tonnes from 4,7 tonnes in the same period last year.