Zimbabwe’s power utility Zesa has reduced its tariff for gold miners by 34% to USc7,87/energy unit following calls from the miners who argued that the charges were hurting their operations.
Gold producers have for years been lobbying government to lower the energy tariff in a bid to ramp up production, saying the current regime will hamper output on the back of fluctuating bullion prices.
Industry experts say this development comes at a time gold producers have signalled their intention to undertake mineral exploration around their mines by 2020. This year gold miners plan to spend US$108 million on expansion projects. A study on the gold sector shows that energy consumption increased in 2016 compared to 2015 and is expected to rise this year in line with the planned projects.
The gold producers are paying a high tariff of 12 cents per kilowatt hour while the rest of the country, including even domestic consumers, are paying around 10 cents per kilowatt hour
“The Chamber of Mines’ gold producers and Zesa agreed on an electricity supply contract based on a forward purchase at a tariff of USc7.87/ energy unit. Gold producers are already enjoying the new arrangement,” a Chamber of Mines executive has said.
According to the 2016 State of the Mining Sector survey, all respondents were of the view that power supply is erratic and resulting in output losses, while 90% predominantly gold producers felt that the electricity tariff for gold is too high.
Gold continues to be one of the key minerals in the country accounting for 47% of mineral exports in 2016 up from 40% in 2015. The sector accounts for 25% of the formal employment while over 300 000 are involved in artisanal gold mining.
The country’s primary large-scale gold producers accounted for 55% of output in 2016, marginally up from prior corresponding year. The contribution of small-scale producers increased from 36% in 2015 to 40% in 2016, while that of secondary producers declined to 5% in 2016 from 10% in prior year.