By Staff Reporter
Energy Minister Jorum Gumbo has moved in to mediate on the impasse between Zimbabwe Supply Authority (ZESA) and ferrochrome producers Portnex, after ZESA last week switched off the company.
ZESA last week switched off Portnex over an estimated $28 million debt.
Production this week resumed at the plant after both parties through the mediation of Gumbo reached an understanding.
Niarchos Investments a local partner with Portnex In regards to marketing and capital requirements confirmed that production has resumed at the company.
“Niarchos is happy that the new Minister DR JM Gumbo has been very proactive and directed the parties to resolve the impasse immediately and allow Zimbabwe to work per His Excellency’ (President Emmerson Mnangagwa) vision. Niarchos Investment is back in business and assisting the country’s export business,” the company said in a statement.
Niarchos Investment which was founded three years ago to engage in chrome production and marketing entered into a Plant Lease Agreement with Zimasco on a five year deal.
Zimasco then was totally shutdown and under judicial management.
Power tariffs in the country Niarchos said still remains unsustainable.
“Zimbabwe’s chrome sector faces a number of challenges however, two critical challenges remain the high cost of mining and high cost of electricity. Government has reduced chrome sector tariff from the general tariff of around 9 cents per kilowatt hour to just over 6 cents. Competing countries like South Africa and India have chrome electricity tariffs of 3cents. This is the figure that will save Zimbabwe’s chrome sector. Niarchos has debated with ZESA over tariffs and details of the agreement with ZESA and the future tariff of the sector remains confidential to the parties concerned,” said the ferrochrome producer in a statement.
This was not the first time the company was switched off.
In 2016 the company was shut down by ZESA after the Environmental Management Agency (EMA) had said the company had failed to submit and environmental plan.
Ironically Portnex was suing Zimasco over environmental pollution and was demanding $500 million on behalf of residents.
Zimasco is now controlled by Sino Steel Company, a wholly owned Chine steel enteprise.