Zimbabwe Economic News: Zesa clears Cahora Bassa debt, gold output rises, propping up AirZim, platinum production

Zesa clears power debt

Power utility, Zesa Holdings has cleared its $76 million debt owed to Hydro Cahora Bassa (HCB) paving way for improved electricity supply in the country.

Since early this year, Zimbabwe has been struggling to service the Mozambique debt due to Zesa’s poor billing system and prevailing liquidity challenges in the economy.

Energy minister Elton Mangoma said the parastatal had now paid all its debt to Mozambique’s HCB as a result of strenuous efforts by all stakeholders in the country.

“For some time Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has had problems in paying for electricity imports. However, due to a concerted effort this matter has been resolved. ZETDC has cleared its outstanding arrears with Mozambique and as of this month is now current with all utilities,” he said.

Early this year, Zesa got $40 million from two local platinum-mining companies, Mimosa and Zimplats and the money was credited to their accounts as pre-payment for electricity.

The power utility had tried to mobilise the funds through massive disconnections, but the response from domestic and commercial electricity consumers, who owe the company in excess of $550 million, failed to address the matter. Wednesday, 24 October 2012 DailyNews

Govt props up AirZim

TREASURY injected close to $1,8 million into the embattled national carrier Air Zimbabwe (AirZim) between July and August as it struggles to stay afloat, official figures have shown.

The Accountant General’s Department consolidated statement of financial performance for the two months showed that $1,5 million was injected into the airline in July.

The amount was double the budgeted $650 000, according to statistics. In August, $260 000 was extended to AirZim in the form of a loan against a Budget of $1,4 million.

Despite the injection and unbundling of the entity into Air Zimbabwe and National Handling Services, the airline remains largely inactive to a limited extent, servicing domestic routes. October 23, 2012 NewsDay

Zim now on platinum stage

ZIMBABWE, which together with South Africa holds 75% of the world’s platinum reserves, has grown production of the white metal by 121% since 2006, while local output has dropped 20% over the same period.

Hamstrung by violent labour unrest, rising costs and increasingly difficult underground mining conditions, South Africa’s platinum production is expected to fall by 607 000 ounces this year, costing mining companies an estimated R8,6bn in lost revenue at current prices. Zimbabwe’s output is expected to increase by 7%.

Should the political situation in Zimbabwe improve, it will become a more attractive platinum investment destination than South Africa.

“The long-term potential of Zimbabwe excites me. It’s a low-cost, high-growth area for investors. I’m much more excited about Zimbabwe than South Africa over the long term,” one platinum analyst said.

Compared with South African mines, which are largely deep underground operations, Zimbabwe’s platinum deposits allow for opencast, mechanised mining, making them some of the lowest-cost operators in the world.

Zimbabwean mining companies have also benefited from low labour costs, which are about a third of what they are in South Africa and limited labour unrest.

However, the cost and availability of electricity remains a problem, one fund manager with exposure to Zimplats said. October 23, 2012 NewsDay

Economic growth achievable: analysts

ECONOMIC analysts have expressed optimism in the recovery of the economy in 2013.

In separate interviews, economic analysts said the economy had the potential to grow if the country managed to implement positive economic policies and utilise its vast natural resources.

Dr Eric Bloch said economic growth could be achieved through analysing economic factors and reviving vital industries.

“The economy has the potential to exceed the five percent growth barrier predicted by the International Monetary Fund (IMF) through revival of tourism, agriculture, mining, manufacturing industry and also utilising its abundant human resource base,” said Dr Bloch.

He said economic growth would slow down if the country failed to attract foreign investors through implementation of policies with assurance of security and political stability.

“There is need for investment in the manufacturing and mining sector in order to create employment and boost productivity hence utilising the abundant human resource base which is more than capable of reviving the economy,” he said.

He said the creation of economic zones would guarantee stimulation of the economy.

Another economic commentator Mr Sam Ncube said economic growth could be achieved through investment and revitalisation of the manufacturing sector.

“The situation on the ground indicates economic recovery although economic growth is attainable if the Government focuses on increasing domestic production and exports.

“Since the beginning of the year 2012 companies and parastatals have been affected by the liquidity crunch and high interest rates which are negative indicators of economic growth,” he said.

He said through increasing exports the economy benefitted by attaining foreign currency rather than the importation of foreign manufactured goods which deterred economic growth.

“There is need to leverage the productive sectors of the economy so as to have economic growth in the country through investments in energy and water supply,” said Mr Ncube.

The IMF had announced the country’s economic growth is set to increase by five percent by end of 2012 and to register a further one percent increase 2013. Wednesday, 24 October 2012 Chronicle

Gold Production Surges

Gold production jumped 61% to 11 140kg in the 9 months to September 30 this year, the Chamber of Mines of Zimbabwe said in statement yesterday. Output for 2012 is projected to reach 15 000kg as mines ramp up production despite cash constraints. Zimbabwe earned $1.4 billion from mineral sales for the period to September, according to the Chamber of Mines, which represents most medium- and large-scale miners. Last year, Zimbabwe produced 12 993kg of gold – Herald, Wednesday October 24,