HomeBusiness DigestZesa's load-shedding costs Falgold 10% of revenue

Zesa’s load-shedding costs Falgold 10% of revenue

Shakeman Mugari

RANDOM load-shedding by the Zimbabwe Electricity Supply Authority (Zesa) is costing Falcon Gold Zimbabwe Ltd (Falgold) 10% of its revenue each month, the mining company has said.

Financial director Garry Perotti said the load-shedding would cost the group close to 10 kg of its total monthly gold production.

“Generally our production has been affected severely,” Perotti said.

The mining group said power rationing would reduce revenue by $90 million and would affect earnings if the situation persisted.

A kilogramme of gold costs $9 million.

The power cuts are also expected to have a negative bearing on the company’s earnings.

Falgold warned about the random load-shedding, saying it could be fatal for mineworkers.

“If Zesa switch off and we have mine workers still underground then it will have fatal results,” Perotti said in an interview.

“We will not be able to supply them with air.”

Falgold is negotiating with Zesa through the Chamber of Mines of Zimbabwe to resolve and “minimise” the effect of load- shedding on production.

Another mining company, Bindura Nickel Corporation (BNC), said it was still to feel the impact of the power cuts.

A senior company official said operations had not been severely affected by the loadshedding

“We are only reducing power consumption in the less sensitive areas,” he said.

BNC said they had an understanding with Zesa not to switch them off. In return the company agreed to reduce its power consumption.

The Chamber of Mines said it was still ascertaining the impact of power cuts on the industry.

“There are ongoing consultations between the government, Zesa and the Chamber of Mines,” said the chief executive officer David Murangari.

In a statement Zesa said there were no plans to exclude mines from the power rationing exercise.

“Load-shedding is an inevitable exercise, which cannot be applied sparingly,” the statement said.

Meanwhile, Zesa’s bid to persuade major exporters to pay electricity bills in foreign currency continues.

The statement said: “Extensive consultations have yielded significant progress with over 28 out of 35 major exporting customers signing up to pay their bills in foreign currency.”

Previous articleLeadership at the peak
Next articleGono admits failure

Recent Posts

Stories you will enjoy

Recommended reading

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

NewsDay Zimbabwe will use the information you provide on this form to be in touch with you and to provide updates and marketing.