Chinese giant Tsingshang’s Zimbabwe subsidiary, Dinson Iron and Steel Company (Disco), will start importing electricity from Mozambique’s Mphanda Nkuwa hydroelectric power project once complete.
This follows a plan, supported by the Zimbabwean government, to have Disco exclusively import power for the $1.5 billion steel and ferrochrome facility that is coming up near the central town of Mvuma, a small mining town in Midlands province. Mvuma is 530km from the Mphanda Nkuwa hydroelectric power project in Mozambique’s Tete province which borders Zimbabwe to the northeast.
Zimbabwean authorities are negotiating with Mozambique to have the five million tonnes-a-year steel operation, which is now approximately 60% complete, powered under the special arrangement, according to the Zimbabwe Independent.
A Disco official quoted by the paper said dedicated power exclusively for the project would be routed from the Mozambican power plant if the import deals spearheaded by the national power utility, Zesa Holdings, are successful.
Zimbabwe’s Power Woes Affect Disco, Other Chinese-owned Companies
In November last year, Zimbabwe stopped generating power at the Kariba South hydropower station due to low water levels. This move left Zimbabwe reeling from a chaotic scenario where it could not provide enough power for domestic or industrial use.
Additionally, the Southern African nation has heavily relied on coal power since it has an abundance of this resource. However, with the withdrawal of funding by financiers who are now shifting to cleaner energy sources, Zimbabwe is stuck with a resource it cannot utilize to address its power challenges.
In 2021, the Industrial and Commercial Bank of China Ltd. pulled the plug on financing the $3 billion coal-fired Sengwa power plant in Zimbabwe. The move by China’s biggest bank was a blow to coal developers and a pointer to what was coming to African countries that rely on coal for power generation.
Zimbabwe is stuck between the need to create jobs and improve its financial standing but power problems are making it a bigger challenge to make this possible.
One of the biggest challenges to one of the Chinese companies, Zhejiang Huayou Cobalt, the world’s biggest cobalt producer, was the demand that it makes battery-grade lithium in Zimbabwe. Huayou had said that this was “not feasible” due to the power supply shortage, among other key inputs, according to a report by Reuters.
Zimbabwe had made the value addition a condition for approving the Huayou acquisition of the Arcadia mine that battery-grade lithium be produced in five years. This was oblivious to the current power woes.
In March this year, Huayou announced that all production lines at the Arcadia lithium mine had completed equipment installation and commissioning. The statement added that the trial commenced successfully with the production of the first batch of products.
Even as Disco waits, Mozambique is expected to announce a new ‘strategic partner’ for the mega-hydropower project this week. According to the Mozambican online news site Zitamar News, the strategic partner will finance, construct and operate the long-awaited Mphanda Nkuwa hydropower project.
WHY IS THIS IMPORTANT? The Mphanda Nkuwa power facility will be an interesting one to watch since Zimbabwe and South Africa are angling for the power generated there. Southern African countries are struggling with generating their own power which makes Mozambique an important energy player in the region.
Even though Disco has a power deal with Zesa for a dedicated power line to be constructed for the facility, the electricity challenges in Zimbabwe remain a hindrance until conclusively addressed, even though this is nowhere near in sight.
SUGGESTED READING:
- Truth Dig: Clouds Over Africa’s Energy Future by Charity Mambondinyani
- South China Morning Post: Chinese cobalt giant aims to have Zimbabwe lithium project delivering early next year by Jevans Nyabiage
