The economy is on its knees due to rolling power cuts that can last for 20 years, erratic fuel supplies, runaway inflation and a weakening domestic currency which threatens to drag the economy to the pre-dollarisation era.
Business Times established that the country’s largest coal producers have less than a month’s supply of coal as they are struggling to access the diesel required to run their machines. Despite increasing the fuel price twice this week, supplies remain erratic across the country with long winding queues becoming the order of the day.
Zimbabwe has four coal producers; Makomo Resources, Hwange Colliery Company, Zambezi Gas and Garlpex but only the first three contribute significantly to output.
Makomo Resources director Raymond Mutokonyi told this paper that the situation has reached alarming levels and will soon affect electricity generation. Makomo is the largest coal producer in the country.
“Due to crippling fuel shortages we are now forced to operate four times a week. Most of our machines including excavators require diesel to function. If we have a situation whereby the liquid commodity is in short supply, we cannot continue with operations,” Mutokonyi said.
“All combined coal miners are left with coal stockpile of around 12 days making it difficult to produce more electricity in the coming weeks. If the diesel situation persists we are rushing to stage four of load-shedding,” said Mutokonyi.
He said fuel shortages have seen our production levels going down by
50 percent on quarterly levels. Mutokonyi said the sector is doomed if the central bank does not react swiftly to the urgent situation.
Four out of the country’s five power stations are thermal powered.
These are Hwange, Munyati, Bulawayo and Harare and contributed more than half of the 915 MW that was generated yesterday. The country’s largest thermal power station, Hwange, sources its coal from, Makomo, Hwange Colliery and Zambezi Gas.
Zimbabwe’s sole hydro power station, Kariba, where President Emmerson Mnangagwa last year commissioned two units of 150MW each generated
408MW yesterday against the installed capacity of 1050MW due to low
Kariba South Hydroelectric Power Station has been supplying the cheapest electricity in the country at a cost of ZWL$0,02 per kilowatt hour (kWh). Thermal power stations Hwange, Bulawayo, Munyati and Harare, produce electricity at a cost of between ZWL$0,08 and ZWL$0,16 per kWh.
Zimbabwe has a daily peak demand of 1500MW but is currently generating
less than 1000MW from its five power stations. In the past, Zimbabwe turned to regional power utilities to plug to offset electricity demands. However, failure to settle debts has seen regional power utilities switching off the Southern African nation. ZESA owes about US$75m to regional power utilities.
So dire is the power crisis that President Emmerson Mnangagwa has been forced to set up an inter-ministerial committee amid revelations Energy and Power minister Fortune Chasi is failing to avert the energy crisis, barely three months after taking over the Energy portfolio. This development also comes at a time when the country’s largest labour union is threatening to organise general strikes in protest of the rising cost of living. Zimbabwe’s annual inflation raced to 175.66 percent in June, the highest in 10 years.
The committee which is chaired by Chasi comprises of seven key ministers. These are Mthuli Ncube (Finance and Economic Development), Nqobizita Mangaliso Ndlovu (Industry and Commerce), Prisca Mupfumira (Environment, Tourism and Hospitality Industry), Perrance Shiri (Lands, Agriculture, Water and Rural Resettlement), Winston Chitando (Mines and Mining Development), Kazembe Kazembe (Information and Communications Technology) and Monica Mutsvangwa (Information, Publicity and Broadcasting Services). Chasi is currently in South Africa where is expected to negotiate a payment arrangement with the country’s power utility Eskom.
The panic move by Cabinet was disclosed by Mutsvangwa yesterday.
“Cabinet met yesterday (Tuesday and resolved to set up an inter-ministerial Committee to work closely with the Minister of Energy and Power Development in order to facilitate a collective approach in the resolution of the prevailing energy and power supply challenges in the country. It is critical at this point that we putour heads together and this this is why Cabinet resolved to come up with an inter-ministerial Committee,” Mutsvangwa said.
Over the weekend, business almost came to a grinding halt when the country’s largest mobile money platform, EcoCash, went offline due to a technical glitch that was caused by power cuts. EcoCash has helped to increase financial inclusion and is the preferred payment in the wake of the prevailing cash shortages.
Central bank statistics obtained last night show that diesel consumption has shot to the current 3,6 million litres a day from 3 million litres in March as companies turn to diesel-powered generators as an alternative source of energy.
Other than low capacity levels, the power stations are beset by ageing equipment with machinery at the thermal power stations having exceeded its lifespan.
Experts say the power crisis throws Zimbabwe’s plans to attract foreign investors under the banner Zimbabwe is open for business, off track. According to the African Development Bank, Zimbabwe needs US$34 billion to upgrade its key infrastructure which includes energy, transport, ICT and water and sanitation.