Mining ZimbabweLatest Mining News, Policy and Industry Updates

RUNDE Rural District Council has adopted a new environmental policy that would enable the local authority to impose heavy fines and cease operations of rogue miners who fail to comply with environmental laws as it moves to address perpetual land degradation and deforestation due to mining activities.

The local authority approved the policies in a full council meeting held on Tuesday in Zvishavane as councillors concurred that the miners were now an environmental menace. Runde RDC chief executive officer Mr Godden Moyo said the local authority was working with organisations such as Centre for Conflict Management and Transformation (CCMT) to craft environmental policies to address issues of deforestation, land degradation among other issues that are being caused by mining and farming activities.

“Zvishavane is a mining community and we have serious challenges of lack of compliance by miners in the area. We passed environmental policies that compel miners to comply with environmental laws as well as practising sustainable mining that preserves the environment. Issues of land degradation as a result of mining activities are on record and we have been grappling with miners to comply with environmental laws and Environmental Management Agency (Ema). The policies are not restricted to mining but cover a wide spectrum although mining is one of the areas,” he said.

The Sunday News

IT will no longer be business as usual for boards under the purview of the Ministry of Energy and Power Development, as Government is crafting a raft of measures to monitor their performance including subjecting them to routine public scrutiny.

Within the cocktail of measures, the Minister of Energy and Power Development, Advocate Fortune Chasi, has also demanded that the boards especially that of the power utility, Zesa Holdings, regularly appraise the Government and the public of any developments being undertaken at the parastatal.

He said a comprehensive document spelling out the guidelines and mandates to be adhered to by the boards would be released this week.

This comes as Minister Chasi’s appointment of Dr. Sydeny Gata as executive Zesa chairman continues to attract sharp criticism from corporate governance proponents who argue such positions should cease to exist in public entities.

But argues Minister Chasi: “We have given the new board a huge task, a new mandate, which I’m looking forward to release on Monday (tomorrow). I will release a clear document, which will detail what the Government expects from them as to their short-term, medium-term and long-term plans. We have already agreed in principle with them and we are now expecting the implementation matrix and I will be meeting them once a month to be appraised on progress and their intentions so that we manage the process,” said Adv Chasi.

He said members of the public should be privy to the operations being undertaken by the Zesa board since electricity plays a vital part in national economic development.

“The board is expected to reveal everything that it will have undertaken. There won’t be anything that will be hidden because they (board) should appraise the public as well. Industrialists should always be aware of what’s taking place around them, to enable them to plan effectively and they should be aware that at such a particular time there will be no electricity so that they inform their workforce not to report for duty. Information should be in the public domain within the shortest of periods so that members of the public will have confidence on the utility and build that continuity,” said Adv Chasi.

The recently appointed Zesa board is chaired by Dr. Gata with the other board members being Professor Ashok Chakravati, Ms. Rosemary Siyachitema, Mrs. Caroline Mathonsi, Mr. James Muzangaza, Mr. Jonathan Wood, Ms. Stella Nkomo, Mr. Wadzanai Chigwa, Mr. Peace Rugube, and Mr. Eliab Chikwenhere.

Adv Chasi also said the Government was making concerted efforts to offset its outstanding debt to the South African power generator, Eskom.

“We are still committing ourselves to paying Eskom and we are making payment of about US$900 000 (a month) and at the present moment there are no hiccups with regards to payment of the debt, but we are working on coming up with structures in ensuring that we expedite clearing the debt so that we start afresh to negotiate for a new deal.

“It won’t be easily achievable, but we hope to have settled it next year. It’s also important to note that the power we are importing is very expensive and if we pay up, we will also concentrate on working on various projects to improve our supplies . . .,” he said.

Zesa owes Eskom about US$22 million, but has promised to regularly make payments in order to keep the power imports flowing.

Adv Chasi further noted that the power utility was also making concerted efforts to recover more than $1 billion from defaulting customers.

“The debt owed to Zesa by consumers stretches for a number of years and they are trying their best to recover these debts and, in the process, also facing litigation from a number of customers who are not satisfied with the process.

“However, the whole idea is not to threaten people, but we should bear in mind that the debt is very huge and cuts across various categories such as commercial, mining, agriculture and domestic. Government (departments) has fully settled its debt but industry, local authorities and domestic consumers are the ones that still owe Zesa,” he said.

Government departments owe Zesa Holdings more than $100 million.

The Sunday Mail

IMPORT licences for most indigenous oil companies are lapsing at the end of this month, fuelling panic in the critical industry, it has emerged. Zimbabwe is facing erratic fuel supplies against the backdrop of low exports, a weakening domestic currency and rolling power outages.

The situation worsened over the past few weeks as most fuel stations ran out of stocks, immediately evoking yesteryear memories. It also emerged the energy sector regulator, the Zimbabwe Energy Regulatory Authority (ZERA) is dragging its feet, reluctant to renew the licences.

Zimbabwe has six major oil-importing entities. Apart from the Indigenous Petroleum Association of Zimbabwe (IPAZ), five others are international oil companies and some indigenous players who are not members of IPAZ.

IPAZ, which was formed in 2004 after a nasty fallout between local and international oil companies, is the biggest importer of fuel into the country providing 11 700 000 litres of diesel a year and 8 000 000 litres of petrol. Sakunda and Redan, are no longer IPAZ members, after their take over by Singaporean headquarted Trafigura group and Puma.

Sakunda has been accused of monopolising fuel foreign currency allocation, a claim the central bank denies. There is now panic in the critical industry ahead of the festive season. The crisis explains, in part, the current fuel supply deterioration in the country. Zimbabwe’s fuel supply situation has deteriorated sharply in the past fortnight. It is expected to worsen further as the country heads towards the festive period.

The industry has also not been spared as most companies have been running on diesel generators due to crippling power cuts, which is ravaging the already frail economy.

Business Times can report that indigenous fuel players have since approached ZERA with the view to renew their licences. But, players in the industry told this publication this week that there is now “hide and seek between indigenous players and ZERA” with regards to the renewal of their licences. There is suspicion that there may be certain big players in the fuel industry frustrating the licensing system, according to players in the industry.

IPAZ chairman, Aaron Chinhara confirmed the latest development to Business Times this week. “The issue that has caused panic in the fuel industry has been the fact that most import licences for indigenous players are lapsing on December 31, 2019,” Chinhasa revealed. “So we have managed to engage ZERA and were issued with invoices to pay but the invoices have since been regarded as not genuine.

Chinhara added: “I have since paid for the renewal of the import licence but to date we have not received anything. This has massive ramifications on our part in terms of trading because our trading will be made difficult when operating with expired import licences.”

All efforts to get a comment from ZERA were futile. Eddington Mazambani, ZERA acting chief executive officer and spokesperson Gladman Njanji, had not responded to inquiries from this publication by the time of going to print. Zimbabwe’s fuel situation has continued to deteriorate despite weekly price increases. Currently, petrol is trading at ZWL17.44 while diesel is trading at ZWL17.90.

On the black market petrol and other designated fuel stations, the commodity is being sold in hard currency. Petrol is trading US$1.20, which is equivalent to ZWL$27,60, while diesel is trading at US$1.50, which translates to ZWL$34,50. Energy and Power Development Minister, Fortune Chasi, this week told Cabinet: “The fuel supply situation was constrained in the past week due to the depressed uplifts which were experienced early in the week and the previous week.”

However, Chasi said: “It was pleasing to note that the situation improved as the week progressed after the interventions which were done by the National Oil Infrastructure Company (NOIC).”

He indicated that NOIC implemented 24 loadings at its depots, resulting in the daily uplifts surpassing the daily consumption rates of five million litres of both petrol and diesel. The fuel crisis has resulted in most retail outlets closing doors even during the day due to rising costs of running generators.

“The industry has been badly affected by electricity shortages which has seen most industry players resorting to diesel powered power sources,” the Confederation of Zimbabwe Industries president Henry Ruzvidzo told Business Times this week. He added: “But availability of diesel has been a challenge and it is safe to say industry is in deep problems right now.We are always told various stories on power but no solution has come on sight at the moment. It is a sad chapter for the industry.”_Business Times

FERROCHROME producers are lobbying the government to reduce energy tariffs for bills paid in foreign exchange as the sector suffers from price fluctuations on the international market. Zimbabwe has one of the biggest chrome reserves in the region and is pinning its hopes on the mining sector to spur economic growth.

The ferrochrome producers also proposed the setting up of an Inter-Ministerial Committee to address the matter that is now threatening the viability of the industry.

In a letter addressed to Energy and Power Development Minister Fortune Chasi by Portnex International managing director Frikkie Laubscher citing concerns of the industry, ferrochrome producers are in urgent need for a review of the power tariff structure.

“Indeed, the entire ferrochrome industry is on the verge of total collapse and one simply needs to have regard to the significant outstanding foreign currency remittance (CD1 acquittals) position from the sector alone and every producer is in arrears,” said Laubscher. He said depressed prices for ferrochrome and the current tariff regime would reduce output of the sector.

Laubscher implored Chasi to set up an inter-Ministerial Committee to review a proposal submitted to the Ministry of Energy, ZETDC and also discussed briefly with Vice President Kembo Mohadi on November19, 2019.

“We are confident, a review of the tariff (or introduction of set-off incentives) is for the sustainable viability of all ferrochrome producers,” he said.

Chasi could not be reached for comment as his phone went unanswered and he did not respond to text messages sent to him. The cost of power in the country has drastically affected some mining operations that require uninterrupted and cheap power supplies. It has been established that power is critical to economic development and that there is a positive correlation between cheap power supply and growth in gross domestic product.

Therefore, cost of power has remained a nightmare for most mining companies especially for those with high power consumption operations. Despite calls to review downwards the cost of power, cost of electricity has been on the rise amid public outcry. Such a scenario, according to the miners has proven to be unsustainable for mining companies who are already suffering from low commodity prices.

Zimbabwe is facing rolling power outages following a sharp decline in generating power capacity at the country’s hydro-powered station. Water levels at Kariba Dam this year plunged following one of the worst droughts in living memory.

A steep electricity tariff increase and removal of subsidies has to date failed the country to raise enough foreign currency to cover for power imports or to fix its power plants which are in constant need for repairs due to old age. This has forced government to turn to mining companies especially those that export to pay for their electricity in foreign currency_Business Times