Small-Scale Miners Responsible for Huge ZESA Debt – Chamber
The Chamber of Mines Zimbabwe (CoMZ) said that small-scale miners are responsible for the significant debt the mining sector owes to the Zimbabwe Electricity Supply Authority (ZESA), as members of the Chamber are under pre-supply agreements with the power utility.
By Ryan Chigoche
A few weeks ago, ZESA revealed that the mining sector, Zimbabwe’s largest consumer of energy, currently owes a staggering ZWG$684.8 million (US$45.6 million), representing 12% of ZESA’s total debtors’ book. This situation places a significant financial strain on the utility.
This revelation raised concerns, as Zimbabwe’s mining industry has long criticized authorities for their failure to provide a reliable power supply, an essential component for their operations. Mining companies depend heavily on consistent electricity to power machinery and equipment critical for extraction and processing. Without a stable power supply, productivity is severely compromised, leading to increased costs and inefficiencies.
Speaking to Mining Zimbabwe, Chamber of Mines Zimbabwe President Thomas Gono stated that small-scale miners are responsible for the debt, as members of the Chamber are already in pre-supply agreements with the authority.
“Members of the Chamber of Mines enter into power supply contracts, some of which provide for prepayments for estimated electricity requirements. In some instances, these agreements assist ZESA in amortizing obligations with their regional suppliers for imported power. For those not in such contracts, failure to settle electricity bills will result in termination of the power supply. Further analysis of the debt indicated by ZESA shows that the bulk of the arrears are attributable to small-scale operations,” Gono said.
“The Chamber of Mines continues to encourage its members to settle their electricity bills timeously to provide cash flow capacity to ZESA and ensure that ZESA continues to supply power into the economy,” he added.
Faced with a debt crisis, the Zimbabwe Miners Federation (ZMF) recently advised its members to switch to the prepaid smart metering system for electricity to prevent worsening power supply issues that could negatively impact their operations.
It is important to note, however, that artisanal and small-scale miners account for at least 60% of the country’s gold output. According to the country’s exclusive buyer of the yellow metal, Fidelity Gold Refinery (FGR), artisanal and small-scale miners delivered 2.4 tonnes of the precious mineral, a 50% increase from the July figure of 1.6 tonnes.
Underpinned by the small-scale mining industry, Zimbabwe’s overall gold deliveries during the same period improved by 36% to 3.4 tonnes, compared to 2.5 tonnes in July this year, while large-scale producers’ output increased to one tonne from 999 kilograms in July.
Gold remains Zimbabwe’s top export earner, with the government targeting 40 tonnes of gold production this year, up from 30.1 tonnes in 2023. By next year, gold is projected to generate US$4 billion, up from the current US$3 billion.