The mining sector is the second largest national income generator after wholesalers and retailers producing 11% of national income, 83% of exports, 19% of government revenue, 2% of direct formal employment, and 73% of foreign direct investment. The players had initially envisioned the 2023 revenue at US$12 bn but the recent hit-felt national power crises have put the sector in the blast furnace.

The operational constraints have left the sector with the need to review the 2023 revenue downward to US$7.5 bn. This nosedive has initially been pointed to increased electricity charges. The emerging power shortages and 2023 proposed value-added tax increase is expected to widen the gap.  

The expanding sector has applied 2200MW worth of power to ZESA for 2023 operations. This, however, unfortunately, is beyond the power company’s capability as it is operating on 19-hour residential load-shedding.

ZESA normally operates at a capacity of 1600MW plus an additional 250MW recorded as imports from South Africa and Mozambique to make a total of 1850. After the Zambezi River Authority ordered the Kariba South Bank power station the whole nation is living on an average of 500MW with the latest of 494MW recorded yesterday, Dec 6th.  

This high-magnitude electricity shortage is expected to run into 2023 as the proposed suspension is expected to be reviewed in January 2023 when a further review of the substantive Hydrological Outlook at Kariba will be undertaken which will include consideration of the total reservoir live storage build-up which would have resulted from a shutdown of the Kariba South Bank Power Station power.  

In addition to energy constraints, the mining sector also deals with high-cost structures brought on by taxes, fiscal fees, and a lack of foreign currency. The government has recently reviewed upwards the value-added tax from 14.5% to 15% previously operated prior to COVID-19.

The outlook is that the pre-11 % growth forecast for the sector is most likely unachievable if all the bottlenecks are not addressed. The national income figure outlook of 3.8% is also greatly strained downwards by 40 basis points (bps) to 3.6% owing to the power shortage situation. This could nosedive by a higher margin if the electricity alternatives are not explored.