Mining can be offered all the political will it requires—but unless electricity supply improves, it won’t be worth much. JAMES CHAVULA tracks the power blights in commemoration of the International Energy Day today (Friday).
When people talk about Zalewa, they often talk about a bustling roadside market which welcomes travellers with basketfuls of vegetables, fruits, meat and other farm produce. But it is only when you trek past the buzzing business spot that you see that founding president, the late Hastings Kamuzu Banda’s timeless maxim “chuma chili m’nthaka’ is more than just dialing up agriculture as the country’s economic stronghold.
At a time government has made unlocking mineral wealth that lies beneath the ground as a key to healing and growing the country’s devastated economy, Zalewa Agricultural Lime Company (Zalco) in the vicinity has survived slightly over a decade in the multibillion kwacha industry and now employs about 150 Malawians.
To the firm’s managing director Martin Saunders, the years of producing lime for farming, industrial and construction use have brought to the certainty about the emerging sector: The country must surmount electricity woes to unleash the mining industry’s potential to transform its ailing economy.
“There is a lot that should happen to change the situation,” says Saunders, “but power problems, especially massive load shedding and sudden blackouts, have become a major challenge.”
Saunders could not convert the loss his company suffers due to intermittent power and shortage of skilled personnel, but says more efficient power can help boost the industry Minister of Mining John Bande envisages to start accounting for 20 percent of national income by 2016.
However, the impact of low generation capacity, unreliable transmission, urban-centred distribution network, lack of investment capacity and degradation of natural resources were all to blame for high frequency of power outages long before the country started mining uranium, the second largest export commodity after tobacco, in 2009. The same year, the national enterprise survey, heavily quoted by the World Bank, listed unpredictable power among top five main obstacles of doing business. The bottlenecks include poor access to finance, transportation, informal practices and tax rates.
As a matter of fact, Paladin Africa, who extract uranium at Kayelekera in Karonga, switched from the nationwide hydropower grid to diesel generators. According to the US-funded Millennium Challenge Cooperation (MCC), the investor requested 100 percent reliable electricity provision from of Electricity Supply Corporation of Malawi (Escom) which the State-held firm could not guarantee.
Of course, there is no country in the world that can supply faultless electricity all year round. However, the experience at the source of the radioactive mineral which accounted for 16 percent of national exports last year, according to the Economist Intelligence Unit, mirrors a long-drawn-out problem.
The woes are not exclusive to Zalco and Paladin.
At Lunzu Quarry, Terrastone manager Isabel Oliviera says energy problems constitute a major cost to mining companies, but they are petering out as the country reels from shortage of petroleum fuels experienced between 2009 and last year.
“Power blackouts are a major inconvenience, but at least we now have consistent supply of fuel. There was a time we had to struggle to find fuel for backup generators. If there was no electricity, we had to shut down,” says Olivera.
Terrastone produces about 250 tonnes of quarry at the Blantyre site and Njuli in Chiradzulu—offering jobs to about 100 workers.
According to the mining authorities, power cuts can be costly as restarting heavy machines sometimes takes up to an hour.
Bande and Minister of Energy Ibrahim Matola cited various projects to lessen power problems hampering the mining sector which contributes 10 percent of the gross domestic products. The initiatives include the rehabilitation of Nkula and Kapichira hydropower stations as well as the 300MW interconnection deal with Mozambique’s Cahora Basa Dam which President Joyce Banda signed in April, said Bande.
“The power interconnection agreement to tap electricity from Mozambique and the renovation of Nkula A and 64MW Kapichira hydropower plants show there is political will to solve the problems not by lip service but action,” says Bande.
Recently, government also signed an agreement with Intra-Energy Corporation to set up a 120 megawatt coal-fired power generation plant in Salima. Also noteworthy in boosting generation capacity is government investment in the rehabilitation of the 64MW Kapichira II and the interconnection of the planned construction of the 342MW Songwe River Basin project (342MW) and the 144MW Lower Fufu Falls hydropower plant.
In 2007, Escom was generating 285 megawatts of which only 255 was available to its customers who constitute eight percent of the national population, estimated at 15 million.
According to a 2007 Welfare Monitoring Survey, those with access to electricity account for over 90 percent of the urban population and less than one percent of the rural masses.
MCC projected the demand for power in the country at 325 MW in 2010, saying it is likely to reach 478 MW next year and 757 MW in 2020.
Given the expected load growth, the country ought to be better equipped to meet the rapidly growing demand for reliable energy.
Early this year, the Malawi Institute of Engineers (MIE) urged government to encourage thermal electricity generation and privately owned plants to meet the swelling pressure.
As government is making inroads into mining, experts say economic losses relating to power outages are likely to be equivalent to about three percent of national income.