TA pins hope on reviewed power tariffs

HARARE - Investments group TA Holdings Limited (TA) is expecting a viable Sable Chemicals electricity tariff to be finalised during the second half of the year as it seeks to minimise losses by the fertiliser manufacturing unit.

In its unaudited statement for the half year to June 2014, the group says while significant progress has been made in the negotiations for a viable tariff, the company was yet to receive sufficient power supply in order to operate at profitable levels.

“In light of this, returns to be realised from Sable are still uncertain and the investment in this company remained impaired as at 30 June 2014.

“The group is optimistic that a viable electricity tariff for Sable will be finalised during the second half 2014. In addition, it is anticipated that normal power supplies will be restored in the third quarter,” TA said.

According to the investment group, a viable tariff will enable the company to complete refurbishment of the plant so as to return the company to its installed capacity.

“As part of its strategy to move away from electricity usage, Sable is currently engaged in investigations to explore the use of Coal Bed Methane as an alternative feedstock in the manufacture of Hydrogen.

“This study will compliment earlier feasibility studies on coal gasification. It is anticipated that the choice of technology will be finalised after completion of this investigation so that migration to a new technology can be done expeditiously,” said the group.

The Kwekwe-based Sable, currently operating at 40 percent capacity utilisation and employs close to 500 workers, has been struggling mainly due to high production costs, particularly electricity charges.

Its 42-year-old plant requires 115 megawatts to power a 14-unit electrolysis plant.

The power is supplied by national utility Zesa through a dedicated sub-station.

For quite some time now, the company has been seeking investors to switch off the electrolysis plant completely and changeover to coal gasification in phases, as it seeks a more cost-effective way of producing hydrogen.

Sable, Zimbabwe’s sole ammonium nitrate (AN) manufacturer, shelved the coal gasification project in December last year due to funding constraints.

It produces between 70 000 and 80 000 tonnes of AN fertiliser monthly.

 

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