Harare - Zimbabwe's platinum miners and ferrochrome producers reached an agreement with power utility Zesa Holdings to pre-pay for power directly from regional suppliers amid dollar shortages in the country.
“This is a payment plan and it’s confidential,” Zesa chief executive Joshua Chifamba said on Friday in an interview in Kariba.
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,” 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 and Mozambique’s Cahora Bassa hydro power plant. Electricity production from the Kariba power plant has fallen after reservoir levels dropped to their lowest in decades following a drought.
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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.
Similar deal
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 and mobile-phone operator Econet Wireless Zimbabwe.
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, Chifamba said.
The $355 million (R4.77 billion) upgrade will increase power production from the current 750MW to 1050MW by 2019, assuming sufficient water levels in the dam, the world’s largest by volume.
Ferrochrome production in Zimbabwe decreased significantly after the government allowed miners to export unprocessed chrome ore in 2009.