Zimbabwe miners can pay for electricity in foreign currency

0
An illegal money changer counts dollar notes in Harare, Zimbabwe, January 10, 2019. REUTERS/Philimon Bulawayo

Zimbabwe mining companies can pay for electricity in foreign currency to guarantee supplies, the energy minister said on Friday, a day after he indicated there could be deeper power cuts in the country due to low dam water levels.

Fortune Chasi said on Thursday the country’s largest hydroelectric plant, Kariba Dam, will suspend output in 14 weeks if water levels continue to fall at the current rate.

State utility Zimbabwe Electricity Transmission and Distribution Company (ZETDC) this month announced the worst rolling power cuts in three years, and although mines have been spared so far, analysts say the cuts will hurt economic revival efforts.

“Exporting mining firms can also enter into foreign currency payments arrangements with ZETDC on a back-to-back arrangement with regional utilities.

“To enable the utility to secure more imports,” he told mining executives at an annual meeting of the Chamber of Mines in Victoria Falls.

Power imports are cushioning platinum mining companies against the electricity cuts, but gold mines could face production cuts as they continue to rely on an unstable national grid, industry officials have said.

Zimbabwe produces 1,100 megawatts (MW) of electricity a day against demand of 1,500 MW.Demand is expected to increase during the winter peak period, adding to the pressure on the grid.