The Sunday Mail
SABLE Chemicals, the country’s sole ammonium nitrate (AN) fertiliser manufacturer, is presently saddled with a US$57 million electricity debt, raising the spectre that the company might fail to supply the key farming ingredient in the forthcoming summer cropping season.
The firm has the potential to produce an estimated 240 000 tonnes of fertiliser per annum but is currently producing around 70 000 tonnes weighed by an obsolete electrolysis plant that manufactures hydrogen, a key component in the production of ammonia.
The Kwekwe-based plant, which was commissioned in 1972, consumes a lot of electricity due to the inherent inefficient technology that is currently being used.
At full capacity, the company requires 115 megawatts, but is currently using 70 megawatts, which it hopes will produce 100 000 tonnes of AN.
Sable has since advised its shareholders, including the Government , which holds 38 percent share, that alternative options are needed to keep the company afloat.
Discussions with power utility, the Zimbabwe Electricity Supply Authority (Zesa), are currently being pursued in a deliberate bid to secure a negotiated power tariff.
Sable Chemicals chief executive officer Mr Jack Murehwa said last week the cost of electricity is of major concern for the fertiliser-making company.
“Because of the strategic placement of Sable in the nation’s economy, the cost of power to produce AN at the factory is always a subject for discussion amongst the three players – Government, Sable and the power utility.
“This installed capacity, however, is currently operating below capacity for reasons that include inadequate working capital and funding to speedily repair or replace equipment and components,” said Mr Murehwa.
He, however, could not be drawn into revealing the finer details of the negotiations.
“It will not be proper to discuss the nature of the commercial arrangements in place but suffice to say that the importance of Zimbabwe maintaining its capacity to manufacture its own ammonium nitrate for both crop top-dressing and as an input in the manufacture of NPK compound fertilisers is taken very seriously as a national strategic goal.
“It will also be worth noting that Zimbabwe’s installed fertiliser manufacturing capacity for both straights and compounds currently exceeds national requirements at current levels of agricultural production.
“This is a strategic national positioning that would be very important to maintain and grow as national agricultural production continues to grow . . .
“Sable is committed to replacing the electrolysis technology in the shortest possible time. To date, a lot of work has gone into considering coal gasification using coal as the feedstock in the making of hydrogen.
“More recently, it was possible to confirm that coal bed methane (CBM) from Lupane could be a possible feedstock in the making of hydrogen at Sable using steam reforming technology because a project based on CBM comes with reduced handling costs . . .
“Sable is therefore now focusing on CBM from Lupane as feedstock,” explained Mr Murehwa.
A recent feasibility study on coal gasification indicated that the replacement project would require at least US$680 million to ensure efficient production at the Kwekwe-based company.
Zimbabwe requires an estimated 300 000 tonnes of AN per summer cropping season, but production has been averaging between 8 000 and 9 000 tonnes per month since the beginning of the year.
