The Sunday Mail
Sunday Mail Reporter
Leading chrome processor AfroChine Smelting has partly shut down operations to protest failure to access a special electricity tariff.
The AfroChine project is regarded as one of the “low hanging fruits” that have potential to boost the country’s economic activity in line with the goals of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset).
Last Friday, AfroChine wrote to the Chief Secretary in the Office of the President and Cabinet, Dr Misheck Sibanda, complaining about the prohibitive electricity cost among other bureaucratic processes stalling the project.
This came after Deputy Chief Secretary Colonel (Retired) Christian Katsande pledged the office would intervene in the matter during last Wednesday’s tour of the AfroChine plant by senior Government officials and the visiting National Development and Reform Commission of China (NDRCC) delegation.
AfroChine said spanners were being thrown into their plans to increase chrome processing capacity from the present 50 000 tonnes annually to one million.
Special electricity tariffs were in place for the chrome industry before and after Independence, but the facility was terminated soon after AfroChine commenced operations in 2013.
A subsidiary of one of the world’s leading processors of chrome, Tsingshan, AfroChine has also put on the table an offer to inject US$1 billion to fund other chrome miners, upgrade operations by setting up a stainless steel manufacturing plant as well as build a thermal power station.
In an interview last Friday, AfroChine managing director Mr Benson Xu Kemin said, “We have written to the Chief Secretary following the recommendations that were made during the tour.
“We are now waiting for the responses and we hope that from now, things can begin to move,” he said.
During Wednesday’s tour, Mr Benson told Government officials that AfroChine’s ambitions were being stifled by the prohibitive tariff regime and red tape.
“What we are processing is actually less than our capacity and we want to produce more of the resource. ‘Electricity accounts for 13 percent of the production costs. When we started we had a special tariff of six cents per unit but we are now paying nine cents which is not sustainable. We had to voluntarily shut down one of our plants,” he said.
“We want to proceed with the stainless steel project, which is the next phase of our plans. ‘This project will also see us constructing a power plant.”
Zesa spokesperson Mr Shepherd Mandizvidza told The Sunday Mail that the power utility had come up with a proposal for a new tariff regime for the chrome industry, which now awaits regulatory approval.
“The Zimbabwe Electricity Transmission and Distribution Company has always been responsive to the chrome industry’s and has come up with a proposal that has been submitted to Zera (Zimbabwe Energy Regulatory Authority) for consideration. Zera has the mandate of awarding and approving all electricity tariffs.
“However, owing to the confidentialities that bind the relevant processes, we are not at liberty to shed more light on the matter until the regulator has conclusively dealt with the request,” he said
Zera officials were not available for comment by the time of going to print.
AfroChine is a subsidiary of China’s second-biggest stainless steel products manufacturer, Tsingshan Group.
Tsingshan accounts for 15 percent of the total output of stainless in the world and the company has a significant say on global prices of the product.
