COUNTRY IN FOCUS
demand. The Kariba Dam hydroelectricity pump station, which provides
Zimbabwe with 57% of its electricity, is struggling to run at maximum
capacity and generate 358MW daily (which provides electricity to about
30 000 homes). The Kariba dam, on the border between Zimbabwe and
Zambia, is at low levels due to a poor rainfall season last year and is currently
producing only 34% of capacity. To make things worse, Hwange Colliery’s
power station, the only coal powered station in Zimbabwe, is producing less
as a result of old and deteriorating infrastructure.
According to Moina Spooner, from The Conversation Africa, Zimbabwe
produces 1 100MW of power against a national demand of 1 500MW. This
leaves a supply gap of 400MW. The deficit is catered for by imports from
Mozambique and South Africa.
A recent drought has left the Kariba Dam with low levels of water, which
adversely affects the hydroelectric power stations at the dam wall.
“But payments for these imports aren’t easy to keep up with. For the past
10 years Zimbabwe has been going through a currency crisis caused by
hyperinflation. This has severely eroded the power of local currency, leaving
the Zimbabwe Electricity Supply Authority (ZESA) in a financial quagmire.
They currently owe Eskom, South Africa’s power utility, over USD33-million,”
says Spooner. In the meantime, the country reportedly made a payment of
about USD10-million to Eskom.
“Because of these challenges, any drop in national production
means the government has to ration electricity. ZESA
recently started a load shedding plan to prevent the
collapse of the country’s power grid,” says Spooner.
Other challenges
Rolland Kuchocha is a Zimbabwean
currently working in South Africa,
but still does a lot of business in
Zimbabwe. Kuchocha recently formed
a company in Zimbabwe called the
Zimbabwe Mining Network. He says
that, economically, the country
is going through tremendous
uncertainties, especially in terms of
currency. “It is difficult to plan in the
short term but some of the pain and
uncertainties are a direct result of
the necessary alignment of currency
in use with the reality of the need
to move pricing from the US dollar to
local currency – to enable export growth
among other issues. Hopefully with the
recent regulations to price only in Zimbabwe
dollars, the situation will get under some level
of control,” says Kuchocha.
"But spiralling inflation is not
Mnangagwa’s worst headache.
The country’s lights have
literally gone off.
“There was a lot of investor interest soon after the change of
leadership in November 2017, with clear jostling to view what had
been closed for decades. This year, the pace has been slower. Perhaps only
real investors have remained out of the initial surge where many could have
been looking for easy picks. In the platinum sector, for example, there might
also be a sense that the mines should not flood the market with the white
metal. So, we are unlikely to see more players and projects, above what we
have currently (in various stages of development) joining,” says Kuchocha.
The mining industry in Zimbabwe is unique. Besides platinum, coal and
coalbed methane, which are best mined by major mining companies,
the rest of the minerals lends itself to be exploited by junior companies
and small-scale miners. It is reported that there are over half a million
small scale or artisanal gold miners active in the country. The small-scale
miners are informal. Kuchocha says that such mining is probably good for
wealth distribution, but it is not safe, and the health of workers and the
environment are detrimentally affected. Reports of rivers being polluted and
rising fatalities in especially gold mines are on the increase.
According to Kuchocha, the challenges in Zimbabwe are many. “It has
become difficult to repatriate foreign currency, but this has been the situation
for the past decade,” he says. He adds that all the same exports have been on
the rise in recent times, signifying that it is not all doom and gloom, and this
means that some investors still see the upward potential of the country.
Junior companies are finding it difficult to raise funding for exploration
projects in Zimbabwe.
26
African Mining September 2019
Zimbabwe has a reasonable road network that covers the entire country, but
the state of the roads is, according to Kuchocha, not good but is currently
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