Sufficient energy supply critical for 2022 mining growth
The state of power supply will determine Zimbabwe’s mining performance this year and the moot Energy Intensive User Group (EIUG) could shift the industry’s trajectory for the better by addressing the energy challenges which are bedevilling the mining industry.
Prince Sunduzani.
This could catapult Zimbabwe’s mining fortunes as it might bail out mining houses that are drowning in high operational costs, resulting from using alternative power sources.
According to the Zimbabwe National Chamber of Commerce (ZNCC), power cuts have pushed production costs up by 150%.
The Chamber of Mines says the electricity supply sector remained fragile with outages attributed to both demand management and faults.
Several mining houses had resorted to alternative power sources such as diesel generators and solar farms to bridge the power gap, created by the erratic power supply from Zesa.
The Chamber of Mines confirmed that the National power utility, ZESA Holdings, had constituted a group called the Energy Intensive Users Group (EIUG) for joint access to power as electricity shortages wreak havoc in the country.
Minutes of a meeting held on 26 April 2022 at Zesa National Training Centre, seen by private media, indicate that the EIUG can import power upon approval from the Zimbabwe Energy Regulatory Authority (ZERA) as prescribed in the Electricity Act and can hold funds outside the country.
“The Government established the Energy Intensive User Group (EIUG) to facilitate the direct importation of energy from primary producers and traders within the Southern African Power Pool (SAAP). The initiative had been approved by ZESA and ZERA. A constitution for the EIUG was adopted, and board members were appointed, with the majority of them coming from mining corporations. The Chamber of mines is engaging Government and ZESA on this matter. Meanwhile, the electricity tariff was increased from around USc9.86/ KWh during the period under review. to USc10.63/ KWh effective 15 May 2022,” said the chamber of mines in a statement.
According to the minutes, the meeting recommended that four individuals be appointed as EIUG inaugural board members, with three more members to be appointed at a later date.
Representatives from Blanket, Afrochin, Riozim, and Eureka mines were then nominated and elected as the first members of the EIUG board, with the secretariat to be determined later.