Zimbabwe drafting new coal tariffs

Published: 10 October 2019
GOVERNMENT has paid tribute to Makomo Resources for keeping the nation's lights on by continuously supplying coal to the Zimbabwe Power Company at a time the country's economy and coal mining sector are facing challenges.

A director in the Energy ministry, Benson Munyaradzi said Makomo Resources is now the largest coal producer in Zimbabwe given that some coal mining companies were faced with operational and viability challenges.

"Makomo Resources is a long standing strategic partner to the ministry of energy and to the Zesa group, in particular the Zimbabwe Power Company (ZPC). Government appreciates the sterling work that you continue to do in supporting the country's energy sector.

"It is common knowledge that Makomo Resources is now the country's largest coal producer and it is also the most reliable supplier of coal to the country's thermal power stations. We congratulate you for the achievements you have made so far (in the nine years of existence) which we know has come at great cost to you and your stakeholders," Munyaradzi said.

He added that government valued Makomo's contribution to the energy sector, adding that proof of this statement was through its (government) assent to a request by the coal mining firm for a coal tariffs review.

"We are facing a situation where the tariffs in place at the moment cannot meet the costs of producing the coal that is used in the thermal power stations. As government, we are addressing this challenge (of pricing)," Munyaradzi said.

"… I am happy to say that we have reviewed these tariffs and a new tariff structure would be announced soon. For you as a coal producer, we know that you have been pushing for a review of the price that you charge when delivering coal to our power stations. Just to let you know, we fully recognise the need to review the coal prices as has been the push from Makomo Resources. We want to assure you that government is indeed working on this matter and will indeed announce a new tariff soon as I have indicated."

Munyaradzi also revealed that government had set an ambitious target of generating 300 megawatts of energy from solar per year in the next 10 years as it moves to tackle the rolling power cuts facing the country. Recent statistics show that Zimbabwe generates about 400 megawatts of energy from both hydro and thermal power against its estimated demand of over 1 200 megawatts. This has seen the country having to rely on power imports from countries such as South Africa and Mozambique.

Munyaradzi said solar energy could be the answer to the country's power challenges in the near future.

"Our aim is to build a minimum of 300 megawatts of energy per annum for the next 10 years which should be able to assist us in closing the gap as well as assist in replacing old and out-dated power plants," Munyaradzi said.

He added that there was need for major investments in solar energy which would require partnerships with foreign investors.

"You will appreciate that this demand for investment in the solar energy I have alluded to comes at a time our country's economy is faced with challenges. This calls for partnerships with investors from elsewhere to set up these facilities," Munyaradzi added.

He noted that Kariba hydro power station was operating at its lowest capacity due to poor water levels in the dam following a drought.

"As you know, the country has relied on Kariba dam as the largest source of power. This has changed, rather dramatically, in the last three years. Kariba has been the victim of drought in recent years and it seems this might actually become the new normal.

"Today we can only generate 10% of the power that used to come out of the Kariba power station, which means that the shortfall of 900 megawatts will need to come from somewhere else," he said.

"The immediate alternative is coal. But Hwange power station is old and can only generate a minimum of 500 megawatts of electricity due to its status at the present moment," Munyaradzi added.
- online
Tags: Coal,


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