HomeBusinessRight power tariff needed to attract investment, enable mining operations: Chidakwa

Right power tariff needed to attract investment, enable mining operations: Chidakwa

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A COMPETITIVELY priced electricity tariff is key to attracting investment and enables beneficiation in the mining sector, Mines and Mining Development minister Walter Chidakwa has said.

BY FIDELITY MHLANGA

Mines minister Walter Chidakwa
Mines minister Walter Chidakwa

Chidakwa told delegates at a Chamber of Mines annual general meeting last week that the country must work on the right power tariff to make it possible to beneficiate minerals in the country.

“I know we are in a difficult situation in as far as power is concerned. We talk of value addition and beneficiation and yet we have smelters, which are guzzlers of power,” he said.

“We can’t have them unless we have the right power and competitively priced power. We must work on power. I want to urge this meeting to discuss issues on power. If our model revolves on a 3ckw/h of power, we attract investment.”

Speaking at the same event, Finance minister Patrick Chinamasa urged mining companies to invest in solar power to augment power shortages.

“We have a problem in the mining sector of consistent power supply. I believe, as mining houses, you should be able to invest in solar power generation,” he said.

“I am informed that the technology has become cheaper and more reliable. You can generate to 15 to 20 megawatts at your plant site and probably still have a surplus to feed the national grid. I know of a mining company that is considering going that route.”

Chamber of Mines outgoing president, Toindepi Muganyi concurred with Chidakwa, saying it was important to have the right tariff to sustain mining business in the country.

“The number one area is the issue of power,” he said.

“Power in Zimbabwe, for the mining industry consumes between 7 and 60%, in terms of sheltering business, that the cost of power, it is huge and it is phenomenal. If we have a wrong tariff, that sterilises certain deposits.

“The costs of power at Bindura Nickel Corp Ltd for the smelter is in excess of 40%. It is important that there be the correct tariff and correct of volume of power comes into Zimbabwe or we focus onto that area.”

To improve the power situation, the government brokered a power deal with Eskom for the supply of 300 kilowatts in 2015.

Gold mining firms are being charged 12,8c/kwh, while chrome miners pay 6,7c/kwh

This year, the mining sector is projected to grow by 5,1%, underpinned by a strong performance in major minerals like gold, chrome, nickel and platinum.

The mining industry contributes 15% to the gross domestic product, 30% of revenue to fiscus and attracts 50% of foreign direct investment.

Last year, the sector’s revenue grew by 3,6% to $1,94 billion from $1,86 billion in 2015.

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