Wednesday, May 12, 2021

Zimbabwe government bars electricity company from mining coal

The power utility company, Zimbabwe Electricity Supply Authority (ZESA) Holdings, has been refused permission to mine coal by the government, which said that ZESA should concentrate on power generation only.

ZESA had planned to venture into coal mining in the south-western part of the country to reduce load shedding rate.

Coal shortages have resulted in subdued electricity supplies with industry and households in the country experiencing frequent power cuts.

In March, ZESA Holdings struck a US$800 deal with local company Clidder Minerals to construct a coal mine and two power units in Hwange. The deal came two years after ZESA was granted two mining concessions by the previous ZANU-PF government as the company was seeking to extract more coal, the major component used in power generation at its Hwange Power Station. The project had been on the cards for years.

This week, Minister of Mines and Mining Development, Obert Mpofu, told a state owned weekly newspaper that the unity government has cancelled mining concessions for ZESA in the Sinamatela and Western fields in Matabeleland North Province to allow the utility to focus mainly on power generation and leave mining to mining houses.

“Those claims belong to the state and right from the beginning the allocation to ZESA was not proper,” Mpofu said.

Minister Mpofu said “the state was prepared to supply enough coal to ZESA and there was no need for them to dabble into coal mining”.

ZESA is facing acute shortages of coal to run its largest thermal plant in Hwange and three small plants in Bulawayo, Harare and Munyati.

The construction of additional thermal power units at Hwange has also been hampered by financial constraints.

Meanwhile, Zimbabwe is at risk of being switched off by regional powerhouses if the ZESA fails to settle more than US$57 million debt it owes.
ZESA imports power from the regional powerhouses mainly from Mozambique’s Hidroelectrica De Cahora Bassa, which it owed millions of US dollars.

To raise this money last month the power utility company issued ultimatums to customers to pay up their debts or risk being switched off.
The company gave customers who have not paid their bills from February to settle them by last week or risk being switched off.

In May, the Botswana government announced it would rehabilitate Zimbabwe’s existing electricity supply infrastructure to transit electricity from Mozambique and this will see Zimbabwe benefiting as well.

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