Diversified mineral producer, Rio Zim Limited says its energy projects –the 2 800 megawatt (MW) Sengwa Power Station and the 178 MW Solar project-are progressing well despite financing setbacks and delays in finalization of power purchasing agreements with state utility company, Zimbabwe Electricity Transmission and Distribution Company (ZETDC), respectively.
For the solar project, the Company received four Independent Power Producer (IPP) licences for the establishment of solar farms at Cam & Motor Mine, Renco Mine, Dalny Mine and Murowa Diamonds Mine for own use with excess energy to be sold to ZETDC.
“The Company obtained independent power producer (IPP) licenses for the solar power projects for each operating location. The Company is progressing with selecting an EPC contractor whilst awaiting finalization of Power Purchase Agreements with ZETDC,” the company said in its 2020 Annual Report.
In 2018, RioZim penned a financing deal towards the construction of solar plants at its four locations with a combined output of 178 megawatts worth US$ 210 million with China Gezhouba Group International Engineering Corporation (CGGC).
Meanwhile, the Sengwa coal power project now in phase two meant to expand plant capacity from 700 MW to 2 800MW is still battling financing constraints.
“The efforts to secure financing to commence Phase 1 of the project were significantly hampered by the uncertainties presented by the COVID-19 pandemic. The Company is focused on advancing the financing arrangements in order to make positive progress on the power station,” said Rio Zim.
The energy projects-once completed are expected to power and improve the Group’s gold and diamond production activities while also cutting on inefficiencies brought about by the erratic power supply by ZETDC.
Power challenges are among the key contributors of weaker production output in the mining sector in recent years and the move to invest into smart energy by individual companies could be a viable option.