Sable Chemicals faces shut down…Power cuts to render 500 workers jobless

Sable ChemicalsLovemore Zigara Midlands Correspondent
THE country’s sole fertiliser manufacturer, Sable Chemicals, says its 500 workforce would lose jobs if the government goes ahead with its proposal to cut power supplies for the plant.

Energy and Power Development Minister, Samuel Undenge, on Tuesday said major mining companies and other heavy power consumers like Sable Chemicals, have to reduce consumption by up to 25 percent.

Security cantonments have also been asked to load-shed non essential areas as part of measures adopted by the government to reduce the impact of the massive power cuts being experienced across the country.

This is expected to save about 25MW, said the minister.

Minister Undenge said Sable Chemicals, which consumes 40MW of electricity alone and owes $150 million in unpaid bills to the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), would be weaned off the national grid and its supplies be channelled to domestic consumption.

Sable Chemicals chief executive officer, Jack Murehwa said the proposed move would result in the shutdown of the company and loss of jobs to its 500 workers.

“We’ve read what the minister said through the Press. He’s the minister and what he says is policy. We wait to see what the next course of action is,” he said.

“What this means is that if power supplies are cut we’ll stop manufacturing fertilizer and the 500 people we’re employing become jobless because we’ve no alternative source of power.”

Murehwa, however, said it was not all gloom and doom for the company, a joint venture between Chemplex Corporation and TA Holdings.

The firm recently said it was working on a feasibility study to adopt a new Coal Bed Methane fired technology, which it has successfully completed.

The new technology would generate electricity once commissioned and would feed into the national grid.

The current electrolysis plant was set up in 1972 and has become expensive to run due antiquated machinery.

Murehwa said the firm was looking for funding of up to $600 million to construct a pipeline to transport gas from Lupane gas fields to Sable Chemicals plant near Kwekwe.

Zimbabwe National Chamber of Commerce chief executive officer, Takunda Mugaga, however, applauded the proposed power saving measures and hoped more energy will be channelled to productive sectors.

He said Sable Chemicals was using electricity which it was not paying for yet other industries were closing because of load shedding.

“It’s better to import fertilizer from countries such as China, which is cheaper,” he said.

Zimbabwe Commercial Farmers Union president, Wonder Chabikwa described the move as a “brilliant idea” saying farmers had for a long time engaged Chemplex Corporation to shut down the fertilizer plant.

“The move by the minister is a brilliant idea and this has been one of our protracted negotiations with Chemplex Corporation to shut down the fertilizer plant. Our argument was that it’s a lot cheaper to import the commodity than to manufacture it locally,” he said.

Confederation of Zimbabwe Industries’ Midlands Chamber warned such a drastic measure would result in massive job losses to downstream industries since Sable Chemicals was a big player.

The chamber president, Matthias Ruziwa said the government should assist the fertilizer manufacturer to implement the new technology.

“From a regional perspective as Midlands we’ll be definitely affected and the ripple effects will be felt by the entire economy since Sable is a big player. Already we’re feeling the impact on the absence of Ziscosteel, which used to support the downstream industries in terms of value chain and the results are there for all to see,” he said.

“We hope that this is a temporary measure and the best for government is to assist Sables to set up new technology to replace the electrolysis plant which consumes more electricity.”

Players in the mining sector feared the government would increase the cost of doing business at a time when commodity prices have plummeted on the world market.

“It means we’re going to look for alternative power for some of our operations and this is costly because we’ve to resort to generators.

“Alternatively we’ll have to set up a power plant but this is capital intensive because it comes at a time when we’re complying with setting up of platinum refineries, which is capital intensive,” said a mining executive from a local firm who requested anonymity.

“All this is happening at a time when the price of platinum has fallen by about 50 percent on the world market in three years and this might see some mines streamlining their operations.”

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