Zimbabwe’s platinum miners and ferrochrome producers arrived at an agreement with power utility Zesa Holdings to pre-pay for power straight from regional suppliers in the midst of dollar shortages in the country.
“This is a payment plan and it’s classified,” Zesa chief executive Joshua Chifamba said on Friday in an interview.
Zimbabwe’s Reserve Bank has agreed to make money available for buying electricity, he said. The deal with ferrochrome and platinum producers will go on “as long as the forex challenge remains as it is,” Chifamba said during a tour of a project under way to upgrade the nation’s Kariba power plant.
Zimbabwe, which deserted its own legal tender in 2009, chiefly uses the dollar. It buys power from South Africa’s Eskom and Mozambique’s Cahora Bassa hydro power plant. Electricity production from the Kariba power plant has plummeted after reservoir levels plunged to their lowest in decades after a drought.
The nation has also struggled with foreign currency deficit for months. Zimbabwe has three platinum mines: Mimosa, Unki and Zimplats and the country’s largest ferrochrome producers are Zimbabwe Alloys, Afrochine and Sinosteel unit Zimasco.
The accord permitting the sectors to prepay dealers directly for imported power follows a similar deal reached early January with the Confederation of Zimbabwe Industries, a group of Zimbabwe’s biggest companies including brewer Delta Corp and mobile-phone operator Econet Wireless Zimbabwe.
The upgrade to Kariba is 70 percent done, with the first unit due to come on stream in December and the second in the first quarter of 2018, Chifamba said.
The $355 million upgrade will boost power generation from the present 750MW to 1050MW by 2019, supposing ample water levels in the dam, the world’s largest by volume.
Ferrochrome production in Zimbabwe reduced extensively after the government permitted miners to export unprocessed chrome ore in 2009.
