RIOZIM Limited says the unreliable provision of power is likely to pose a significant risk and drawback to its operations in the current quarter and the near future.
Zimbabwe continues to face energy supply challenges albeit several Government initiatives that intend to curb the menacing power demand.
However, according to the diversified mining concern, the third quarter of the year saw a marked improvement in power supply situation following ZETDC’s commissioning of supplementary capacity at Hwange.
Improved power supply subsequently translated to volumes increase in gold production for the quarter, growing 13 percent to 307kg from 272kg realised in the comparable period last year.
Power availability enabled the upscaling of milling throughput as well as plant availability at near optimal levels.
Chamber of Mines Zimbabwe (CoMZ) recently highlighted that local power producers should brace up for increased demand from the mining sector as mining firms are in expansion mode with some closed mines set to reopen.
This will likely push demand to 2 350 megawatts by 2025.
Zimbabwe’s current peak energy demand stands at 1 800MW against an average combined power generation capacity of Hwange Thermal and Kariba units of 1 285 as at Friday last week.
This calls for consented efforts and clear strategies from the energy sector players in order to address the persistent power outages and looming demand for energy.
“Despite improved power supply during the period, the unreliable provision of power remains a significant risk to the company.
‘‘It is anticipated that power challenges will be exacerbated by the onset of the rainy season expected in the last quarter of the year,” said RioZim in the third quarter trading update to September 2023.
The company said it invested in back-up generators across its mines in order to mitigate the impact of power outages.
“However, these come with high production costs due to excessively high levels of fuel consumption.”
Last year RioZim indicated that it was in discussions with various stakeholders including the
Government on the establishment of a 2 800 megawatt coal power plant in Gokwe North.
The coal project is central to the company’s energy business and it is being pursued when the government is inundated with power projects that are being put in place to curb the energy deficit gap currently bedevilling the country.
Saleem Beebeejaun the RioZim chairman said; “The company is in discussions with a number of stakeholders including various arms of Government on a potential mutually beneficial arrangement on the implementation of this multimillion-dollar project.
“As well, the company is making some effort toward establishing a 178 megawatts solar project.
“On the solar project, the company said it had concluded all the regulatory requirements for the 178 MW Solar Project, which are the prerequisites to the implementation of the solar projects across the Group’s mines.
“All our stakeholders will be kept abreast of all developments on an ongoing basis.”
This also comes as the Government rekindles efforts to bring onboard wind energy into the country’s energy mix as it continues to devise mechanisms to contain the enduring power deficit and anticipated power demand.
Rio Zim highlighted that Exchange rates remained volatile in the third of 2023 leading to price distortions on production inputs a position that continued to balloon the Group’s expenditure which exerted pressure on the Group’s profitability during the period.
In other developments, RioZim indicated that it had embarked on a refurbishment exercise on one of the ball mills at Cam and Motor Mine, which is expected to reach completion during the fourth quarter of this year.
This initiative is expected to ramp up RioZim production and output but this exercise is, however, expected to reduce the processing capacity of the plant, as the mine will be running on one mill.
The Group has embarked on an optimisation and improvement of processes drive that will enhance plant recoveries that were subdued throughout the quarter.