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ZIMBABWE’s leading coal producer, Makomo Resources, says failure by the Zimbabwe Power Company (ZPC) to service its $25 million debt has crippled operations, with output falling to 30 percent of capacity.

Company director Mr Ray Mutokonyi said that production was now at 60 000 tonnes a month from 200 000 tonnes because the company cannot service its equipment.

“ZPC owes us in excess of $25 million and the non-payment means we are not able to service our equipment on time. This then means we are not able to meet our production targets,” he said.

The power generation unit, ZPC, uses between 3 000 and 4 000 tonnes of coal per day, and requires around 120 000 tonnes per month.

Makomo has become a major supplier of coal to ZPC after government-controlled Hwange Colliery Company failed to meet demand due to operational challenges.

“At this rate yes, we cannot meet ZPC demand,” added Mr Mutokonyi.

The coal mining company has a coal concession at Entuba Coal Fields which covers 7 000 hectares.

It is estimated that the open cast resources have a lifespan of more than 30 years at 1 million per annum plus another 100 years of underground mining.

Recent reports indicate that HCCL’s coal output has dropped to a record 36 000 tonnes per month from a peak of about 300 000 tonnes, a trend management blames on severe working capital constraints. Portuguese-owned mining contractor, Mota-Engil who were producing around 200 000t per month from HCCL’s Chaba concession site, have also suspended production citing working capital constraints after the Colliery failed to meet its payment obligations. The company is now owed more than $50 million.

With a drastic drop in output, the pull out poses a heavy blow to the energy sector, which needs reliable coal stocks for thermal power generation. This week ZPC daily power updates revealed that the country’s three thermal stations, Munyati, Harare and Bulawayo, were not producing anything while Hwange Power Station, which has installed capacity of 920MW, was at its lowest producing about 90MW as of yesterday.

The drastic drop in energy output is believed to be linked to inadequate coal supplies. Of late the country relies on Kariba Hydro Power Station, which is generating average 700MW after picking capacity due to improvements in water levels.

Zimbabwe is producing on average 900MW of electricity against demand of around 1800MW. The power utility covers the deficit with imports from regional producers.

ZPC managing director Engineer Noah Gwariro was not reachable for comment. — The Source/Business Reporter