Zimasco halts production due to power disconnections

15 Nov, 2022 - 00:11 0 Views
Zimasco halts production due to power disconnections Zimasco

The Chronicle

Michael Magoronga, Midlands Correspondent

KWEKWE-based ferrochrome producer, Zimasco Private Limited, has temporarily halted operations after power utility, Zesa disconnected electricity supplies from the company over yet to be ascertained reasons.

The development has forced the company to switch off its east plant furnaces.

Zesa stakeholder relations manager, Dr George Manyaya, said he was yet to receive adequate information but Zimasco spokesperson, Ms Clara Sadomba, confirmed the development saying they were in talks with the power utility.

“Please note that we are in discussions with the power utility over recent significant changes in the power tariff,” she said. 

Ms Clara Sadomba

“We are confident the situation will be resolved soon and power will be restored to the smelter.”

Ms Sadomba said in the meantime the company will utilise the period of halted operations to refurbish their furnaces.

“In the meantime, we have taken the opportunity to carry out essential maintenance work on our furnaces ahead of resumption of normal operations imminently,” she said.

Although she could not be drawn into divulging the reasons behind the disconnection, unconfirmed reports indicate that Zimasco and Zesa are at loggerheads over the recent increase in power tariffs, which the company feels are too heavy for the company to operate  profitably.

Reports also suggest that the company is contemplating construction of state-of-the-art furnaces, which consume less power.

In September Zimasco laid off more than 200 employees after the company switched off its West Plant at the Kwekwe-situated smelter amid viability challenges owing to a sharp decrease in global prices of the product.

The closure of the two furnace-plant meant that only the Eastern Plant, which also has two furnaces, remained operational.

Dr George Manyaya

Ms Sadomba said the company was facing viability challenges due to the Russia-Ukraine war and the significant slowdown in economic growth in Mainland China, among other challenges.

She said the company had to take painful measures in a bid to arrest the untenable situation hence scaling down operations by 50 percent.

“The company has, therefore, taken the decision to temporarily scale down the smelting operations by 50 percent of current capacity with effect from 2 September 2022 with two of our four furnaces at Kwekwe Smelter being switched off,” Ms Sadomba then.

She said the company will continue monitoring developments in the market and remains ready to respond swiftly should a change in the prevailing circumstances warrant it.

Zesa

Zimasco will, however, continue with its mining operations including the production of chromite ore concentrates at full capacity to support the build-up of strategic ore stocks ahead of the rainy season and export sales.

The latest development might put a dent to the company’s commitment to its ferrochrome expansion programme at Kwekwe, which is expected to boost capacity. Zimasco had commenced its US$100 million ferrochrome expansion project at Kwekwe this year, which will see its smelting capacity double from 144 000 metric tons of ferrochrome per annum to 288 000 metric tons per annum by 2023.

“We are pleased to advise that this critical value addition and beneficiation project remains on course and will be completed as planned early in 2023 in support of Zimasco’s medium to long-term strategy and the Zimbabwe Government’s thrust to grow the mining industry into a US$12 billion mining industry by 2023,” Ms Sadomba said then.

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