Huge power demand looms

Chamber of Mines Zimbabwe (CoMZ) says local power producers should brace for increased energy demand from the mining sector as mining firms are in expansion mode with some closed mines set to reopen.

As it stands, the sector is facing significant challenges in terms of securing viable electricity with some mines specifically those that are not connected to dedicated power lines, continuing to endure severe power outages resulting in production losses and some mining companies not meeting their production targets.

This has resultantly led mining firms to rely more on expensive and unsustainable sources of energy like diesel whose procurement price has gone up significantly compared to two years ago when a litre of diesel was fetched at US$1. The price of diesel has lately appreciated to around US$1, 70 per litre mainly due to exogenous factors, a development that has had colossal viability challenges for mining companies because the cost structure has just jumped severely.

Mining remains a vital sector whose exports account for about 60 percent of Zimbabwe’s export earnings thus contributing significantly to the national GDP hence the need for dedicated attention to the supply of power to the sector.

According to Zimbabwe Electricity Transmission and Distribution Company (ZETDC) acting managing director, Engineer Howard Choga, the country’s projected demand for energy is likely to reach 2350 megawatts by 2025, especially with high demand from the mining sector.

Critically, Zimbabwe’s major power plants have an installed capacity of 2260 megawatts but lately have seen generation capacity subdued at around 1300 MW with demand hovering at around 1750 MW.

As of last Thursday, the country’s major power producer, Zimbabwe Power Company (ZPC), was generating a total of 1117 megawatts with Kariba accounting for the 854 megawatts, trailed by Hwange at 238 megawatts while Munyati and Harare thermal power stations contributed 14 and 11 megawatts respectively.

The second quarter of 2022 saw Kariba Power station generating 72 percent of the total energy while Hwange Power Station contributed 27 percent according to ZPC, which operates the five power stations.

Small thermal power stations contributed one percent to the total energy production in the quarter.

Kariba’s eight units were operational at the peak generation period resultantly the station exceeded its quarterly target by 14, 17 percent an output that was 6, 39 percent above the 2021 second quarter.

Speaking at a recent engagement CoMZ chief economist, Pardon Chitsuro, highlighted that the chamber expects Zimbabwe Energy Regulatory Authority (ZERA), to license more power projects to support the looming demand in the mining sector.

“We see demand increasing in the outlook as most mining companies are on an expansion mode, some previously closed mines are reopening given the current commodity price boom so we expect a jump in terms of demand.

“Our expectations are that ZERA is going to license more power projects as well as facilitating direct importation of power to supplement what we have, we also advocate for prioritisation of the industry in terms of the available power,” said Chitsuro.

Douglas Chingoka, the Zimbabwe Power Company (ZPC), the corporate executive assistant, said the Hwange expansion project was a priority at the moment with a set target to feed the first 300 megawatts into the national grid by November this year.

“Topical project for us right now is Hwange where we want to bring additional 600 megawatts onto the national grid, we expect to bring the first unit 300 megawatts in November and the second 300 megawatts by March so as to improve the availability of power as we get into 2023.

“In terms of plant refurbishment, we would want to repower our small power stations which have overlived their life and make them efficient in power generation,” said Chingoka.

He said the Hwange Expansion project stood at 84, 82 percent at the beginning of the second quarter and closed the quarter at 89, 95 percent.

Also, ZPC indicated that it has started receiving various components for the Deka project, which is funded from a USD $48.1million Line of Credit (LOC) extended by the Government of India to the Government of Zimbabwe.

Secretary for Energy and Power Development Engineer Gloria Magombo recently indicated that the government had rekindled efforts to include wind energy into the country’s energy mix as it continues to devise mechanisms to contain the enduring power deficit and anticipated power demand.

This is after Zimbabwe Energy Regulatory Authority (ZERA) in 2018 halted the wind energy feasibility study after companies tendered pricey bids which exceeded the estimated budget.

She however acknowledged that the government has received funding from the African Development Bank (AFDB) to explore the potential of wind energy resources.

The mining sector has become the lynchpin in driving the economy through direct and indirect linkages with other key sectors of the economy.

Local minerals output is likely to surge given a rise in the implementation of new mining projects, motivated by the surge in the global commodity price boom which has seen gold production reach a record level in more than two decades.

The sector’s export earnings in 2021 reached US$5, 2 billion contributing more than 85 percent to the national export value.

Isaac Kwesu the CoMZ chief executive has hinted at the local mining industry’s willingness to enhance export earnings from minerals while the government has set an eight percent growth projection for the mining sector in 2022.

Mining industry prospects are positive, buoyed by encouraging commodity price upturn prevailing in the market which has seen mineral prices surpassing their long-term average.-ebusinessweekly