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Zimbabwe: Zimbabwe Energy Profile

2015/01/25

Zimbabwe`s Energy Crisis, Demand -Supply

Energy in Zimbabwe is a critical problem for the country. Mainly, extensive use of firewood leads to deforestation and the electricity production capacity is too low for the current level of consumption.

Coal

Zimbabwe has 30 billion tons of coal in 21 known deposits. This could last for over 100 years at the 2001 rate of production.

In September 2013, the Chinese-backed company, China Africa Sunlight Energy, said it would begin work in early 2014 on a 600 MW coal-fired electricity plant in western Zimbabwe, part of $2 billion of energy projects in the country.

Liquid Fuels

Zimbabwe has no oil or gas resources of its own and is completely dependent on imports for this source of energy. A pipeline from the Mozambique port of Beira to Mutare provides the majority of Zimbabwe's refined petroleum and diesel oil; the rest comes from South Africa.[4] An ambitious project to produce 20% of the country's liquid fuel as ethanol from cane has been started in Chipinge, Manicaland

Electricity

Electricity is generated at the Kariba Dam Hydroelectric Power Station (ca. 750 MW), the Hwange Thermal Power Station (installed capacity 920 MW) and three minor coal-fired stations. All coal-fired stations are in need of major upgrades due to neglect of maintenance and they have frequent production stops or are not producing at all. This leads to frequent and long lasting blackouts.

The governmental owned Zimbabwe Electricity Supply Authority (ZESA) is the nations power generating and distributing company. Imports of energy from neighbouring nations are not enough to solve the undercapacity problem and lack of electricity hampers economic increase. Small scale power generators are used all over the country to relieve the situation.

Animal Power

Animal power is a very useful source of energy in Zimbabwe. It is estimated that animals contribute with the equivalent of 6.8 million liters of diesel in the agricultural sector.

Renewable energy

Apart from the Kariba Dam power station hydropower has still a lot of potential, particularly along the Zambesi river. Solar power has enormous potential both in small scale, such as water heating or in larger scale such as in solar power plants. However, the country's current economical condition makes the latter unrealistic. Wind and biogas energy are other possibilities.

The geology of Zimbabwe is very richly endowed with deposits of chrome, gold, nickel and platinum, part other minerals. The country's gold reserves are part the major in Africa, while it hosts the second-major platinum reserves in the world. An extra segment that has caught the attention of miners in Zimbabwe is diamonds, following the discovery of a number of significant kimberlites.

Indigenous ownership levels under review Zimbabwe’s reputation on the world mining stage remains subject to its uncertain domestic politics and, in particular, continued calls by the government for Zimbabweans to hold majority stakes in mining projects. The Indigenization and Empowerment Act originally called for a 51% stake in all mining companies (with assets over US$500,000) to be divested to indigenous Zimbabwean groups within a fiveyear period.

However, in June 2010, came news that the government would soften this stance, with Harare presently looking to set varying empowerment stakes for different industrial sectors. In August 2010, so-called ‘indigenisation committees’ were set up. These were given a September 30 2010 deadline to submit proposals for what level these %age stakes should be set at, depending on the sector they are in charge of monitoring.

This new development only adds to the growing sense of chaos around this issue within Zimbabwe. It comes as no amaze that a lot of indigenisation committee members are allies of President Robert Mugabe, which raises fears over the transparency of all process. BMI will monitor developments on this topic as they occur. We reiterate our long-held view that there is a pressing need to negotiate with mining companies and resolve the issue of mining ownership once and for all, so foreign investors can work within a clear legal framework.

The push to increase indigenous ownership of Zimbabwean assets was condemned before in 2010 by the country’s Chamber of Mines, with Mining Weekly reporting in May 2010 that the Chamber is petitioning the government to instead impose a variable level of indigenous ownership (from 15% up to 51%), arguing that companies that have invested in schools and roads should be subject to a lower indigenous ownership limit than 51%. Even at present, the regulations provide for a level of indigenisation lower than 51% to be assigned to a foreign-owned company if there are ‘socially and economically desirable objectives’ in favour of this lower level.

Speaking in late May 2010, President Robert Mugabe said that the government would not expropriate any mines and that it was refining the local ownership law to reflect concerns expressed in the industry. He added that foreign direct investment (FDI) would be required to help the Zimbabwean mining industry grow.
Industry Forecast

Zimbabwe’s mining sector has experienced a traumatic series of years over the completed decade. However, there are reasons for guarded optimism as we enter 2010. Investment is returning to the sector, following the establishment of a national unity government. The 2009 liberalisation of the gold sector was a further positive.

As a result, we believe the scene is set for a period of strong increase for the Zimbabwean mining sector, although we would stress that this remains dependent on a continuation of the relative political stability that has endured in recent months. In this context, the developing furore over domestic ownership of mining assets could well become a additional critical issue in the months ahead.

Metals
- Iron
- Gold
- Chrome
- Nickel
- Platinum

Minerals
- Coal
- Diamonds