Zimbabwe platinum mines to ride out power cuts, gold output less secure

HARARE (Reuters) – Energy imports are cushioning platinum mining corporations towards Zimbabwe’s worst blackouts in three years, however gold mines may face manufacturing cuts as they proceed to depend on an unstable nationwide grid, business officers mentioned.

FILE PHOTO: Staff stroll beneath a concentrator at Ngezi platinum processing plant close to Harare November 28, 2013. REUTERS/Philimon Bulawayo/File Picture

State utility ZETDC this week began indefinite rolling energy cuts lasting as much as 10 hours per day, blaming low water ranges on the dam that provides the most important hydro plant and creaking infrastructure at ageing coal-fired mills.

Mining generated most of Zimbabwe’s $four.eight billion of export earnings final yr and the cuts have raised the danger of additional harm to an economic system already experiencing a extreme greenback crunch, hovering inflation and shortages of gas and medicines.

In 2016, in the course of the worst every day blackouts in many years that lasted as much as 18 hours, output at most gold mines was affected.

Zimbabwe Electrical energy Transmission and Distribution Firm (ZETDC) at the moment requested producers to pay extra to ensure uninterrupted provides.

Three years later, with Zimbabwe producing 969 megawatts of energy every day towards peak demand of two,100 MW, the business seems higher ready, and the blackouts have had no measurable impression on both platinum or gold costs.

Nonetheless, officers say gold miners could once more face larger prices this time and will must fall again on costly diesel mills to maintain manufacturing going.

In the meantime, some new mining tasks wish to turn into much less tied to the grid by putting in renewable vitality sources.

PLATINUM PREPARED

The 2 largest platinum producers, Anglo American Platinum and Impala Platinum, mentioned energy provides for his or her Zimbabwe operations had been safe. Implats owns Zimplats whereas Amplats runs the smaller Unki Mine.

An Implats spokesman mentioned Zimplats had secured energy from Mozambique and a deal to make use of Zimbabwe’s transmission community to ship it.

Zimplats, which produced 66,495 ounces of platinum within the quarter to March, listed energy provide amongst main dangers in its 2018 report. It didn’t say how a lot it spent on energy imports final yr.

Amplats mentioned its 85,900 ounces a yr Unki mine had little doubt that ZETDC would ship uninterrupted electrical energy however that, ought to it turn into crucial, “Unki could be allowed to supply the provision of electrical energy externally.”

Zimbabwe is the world’s no. three platinum producer, however patchy energy provides have stopped the business from constructing a neighborhood refinery and it continues to ship unrefined platinum to South Africa.

Producers have invested in energy substations and helped ZETDC keep transmission strains to ensure provides, however in addition they have the financial muscle to import electrical energy utilizing their greenback earnings.

“MASSIVE HIT”

Zimbabwe’s largely small-scale gold miners, which produced a report 996,373 ounces final yr, are nonetheless nonetheless depending on nationwide grid and mentioned any energy cuts would have an effect on manufacturing.

Demand Gwatinenga, common supervisor at How Mine, one of many nation’s greatest and oldest, mentioned it might must rethink its resolution final yr to cease paying the next ring-fenced electrical energy tariff that had turn into too costly.

“It’d make sense to return to (it)… with the hope that it ensures provides. Any interruption …will probably be an enormous hit for us, we will’t afford it,” he mentioned Gwatinenga, including that ZETDC had not indicated if it could reduce energy to the mine.

Mark Learmonth, chief monetary officer of London-listed Caledonia, which owns Blanket gold mine in western Zimbabwe, mentioned it nonetheless paid an 83% premium on the traditional tariff to keep away from energy cuts. Even so, provide had been unstable, and there may very well be as much as six outages of 45 minutes every in a 12-hour shift.

“Now we have back-up diesel mills however given the elevated scale of our operations we now want so as to add additional capability,” Learmonth advised Reuters, including that diesel provide is perhaps more durable to return by because of rising demand from South Africa, struggling an influence disaster of its personal.

Blanket, which produced 69,463 ounces of gold final yr, didn’t have the capability to import energy immediately, he mentioned.

FILE PHOTO: President Emmerson Mnangagwa speaks at a operate the place Cypriot Investor Karo Sources was giving an replace on its $four.2 billion platinum mining undertaking in Mhondoro Ngezi, Zimbabwe, April 17, 2019. REUTERS/Philimon Bulawayo/File Picture

Some new mining tasks are different energy sources. South Africa’s Tharisa Sources, which holds a 26.eight p.c in Karo Sources – planning a $four.2 billion platinum undertaking in Zimbabwe – mentioned Karo would construct a 300 MW photo voltaic plant.

“As soon as the approvals have been signed off, the primary part of round 50 megawatts would take round 12 months to be totally operational,” Tharisa CEO Phoeovos Pouroulis advised Reuters.

Zimbabwe’s greatest chrome miner, African Chrome Fields, mentioned it was utilizing diesel to energy its operations and wouldn’t be affected by the cuts.

Extra reporting by Barbara Lewis and Zandi Shabalala in London; modifying by John Stonestreet

Our Requirements:The Thomson Reuters Belief Rules.

Product categories

X